Purchasing power parity is an application of the law of:

Question

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Purchasing power parity (PPP) is an economic theory that suggests that in the long run, exchange rates between two currencies should even out to the point where goods and services cost the same amount in both currencies. This is based on the law of one price, which states that in competitive markets, the price of identical goods sold in different countries should be the same when the prices are expressed in a common currency. Therefore, PPP is an application of the law of one price.

Purchasing Power Parity Is an Application of the Law Of