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Exchange Rates: Purchasing Power Parity
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Exchange Rates: Purchasing Power Parity
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23. Exchange Rates / Exchange Rates: Purchasing Power Parity / Problem 2
Problem 2
In what way can consumer preferences disrupt the assumptions of Purchasing Power Parity?
A
Consumer preferences only affect non-tradeable goods.
B
Consumers may value certain goods more in one country, leading to higher prices and disrupting PPP.
C
Consumer preferences are uniform across all countries.
D
Consumer preferences have no impact on the pricing of goods.
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