If the law of one price were true for all goods and services,the _________ exchange rate could be found from any individual set of prices.

Question

Quizplus · Accepted Answer

The purchasing power parity (PPP) is the theory that suggests that the exchange rate between two countries should equal the ratio of the two countries' price levels of a basket of goods and services. If the law of one price were true for all goods and services, then the PPP exchange rate could be found from any individual set of prices.

If the Law of One Price Were True for All