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wildcat290 wildcat290
wrote...
Posts: 509
4 years ago
Purchasing power parity does not provide accurate predictions of exchange rates because

▸ almost all goods and services are traded across nations.

▸ governments currently fix exchange rates.

▸ non-traded goods account for 50 percent of the value of production in an economy.

▸ firms are unable to set prices differently across nations.
Textbook 
Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
Authors:
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wrote...
4 years ago
non-traded goods account for 50 percent of the value of production in an economy.
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