Research indicates that deviations from purchasing power parity (PPP) are reduced over the long run.

Name: Research indicates that deviations from purchasing power parity (PPP) are reduced over the long run.
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Question

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Long-term evidence suggests that the law of one price tends to hold, and deviations from PPP are reduced over time as markets adjust. This adjustment process can take years or even decades, but eventually leads to a convergence of prices across countries.

Research Indicates That Deviations from Purchasing Power Parity (PPP) Are