If the law of one price holds for a single good,then absolute PPP measured with price indexes will also hold.

Name: If the law of one price holds for a single good,then absolute PPP measured with price indexes will also hold.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Since consumers in different countries consume different goods, price indexes are not directly comparable internationally. Thus using price indexes to measure PPP creates problems and causes deviations from PPP.

If the Law of One Price Holds for a Single