Generally unfavorable evidence on PPP suggests that
A)substantial barriers to international commodity arbitrage exist.
B)tariffs and quotas imposed on international trade can explain at least some of the evidence.
C)shipping costs can make it difficult to directly compare commodity prices.
D)all of the options

Question

Quizplus · Accepted Answer

All of the given options contribute to the unfavorable evidence on PPP. Substantial barriers, tariffs and quotas, and shipping costs can all make it challenging to achieve perfect arbitrage and lead to deviations from the theory of PPP.

Generally Unfavorable Evidence on PPP Suggests That