Which one of the following statements is the most accurate?
A) The purchasing power of any given country will increase in countries where the prices of non-tradable goods rise.
B) The purchasing power of any given country will fall in countries where the prices of non-tradable goods fall.
C) The purchasing power of any given country will fall in countries where the prices of non-tradable goods rise.
D) The purchasing power of any given country will remain constant in countries where the prices of non-tradable goods rise.
E) The purchasing power of any given country will fall in countries where the prices of non-tradable goods remain constant.

Question

Quizplus · Accepted Answer

Non-tradable goods are those that cannot be easily exported or imported, such as housing and healthcare services. When the prices of these goods rise in a country, it means that the cost of living in that country is increasing. This leads to a decrease in the purchasing power of residents and visitors to that country, as they will have to spend more money to maintain their standard of living. Therefore, the purchasing power of any given country will fall in countries where the prices of non-tradable goods rise.

Which One of the Following Statements Is the Most Accurate