Although the law of one price holds for single products, purchasing power parity is meaningful only when applied to a basket of goods.

Name: Although the law of one price holds for single products, purchasing power parity is meaningful only when applied to a basket of goods.
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Question

Quizplus · Accepted Answer

The law of one price holds for a single product, but purchasing power parity compares the overall cost of a basket of goods across different countries, so it is only meaningful when applied to a basket of goods.

Although the Law of One Price Holds for Single Products