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Purchasing Power Parity Implies

Question 18

Multiple Choice

Purchasing power parity implies:


A) A basket of goods should sell for the same price in all countries, even if trade barriers exist
B) A basket of goods will sell for the same price in all countries as long as there are no trade barriers
C) A basket of goods cannot sell for the same price in different countries due to the different wage rates
D) As long as goods can move freely across international boundaries, one unit of domestic currency should buy the same basket of goods anywhere in the world

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