Macroeconomics
If a product costs ¥10,000 in Japan and \$90 in the US, what should the exchange rate be to maintain Purchasing Power Parity?
In what way can consumer preferences disrupt the assumptions of Purchasing Power Parity?
What role do exchange rate adjustments play in maintaining Purchasing Power Parity and preventing arbitrage?
How do exchange rate adjustments help maintain Purchasing Power Parity?
How do tariffs affect the realization of Purchasing Power Parity?
Why might Purchasing Power Parity fail to explain exchange rate fluctuations for non-tradeable goods?
What is the role of exchange rates in the context of Purchasing Power Parity?
Which of the following is a real-world example where Purchasing Power Parity might not hold?
How do market forces help restore equilibrium in exchange rates when Purchasing Power Parity is disrupted?
