Purchasing-power parity theory does not hold at all times because
A)many goods are not easily transported and the same goods produced in different countries may be imperfect substitutes.
B)the same goods produced in different countries are perfect substitutes for each other.
C)consumer preferences are different across countries.
D)prices are different across countries.

Question

Quizplus · Accepted Answer

Purchasing-power parity theory may not hold because many goods are not easily transported, and the same goods produced in different countries may be imperfect substitutes, affecting price equalization.

Purchasing-Power Parity Theory Does Not Hold at All Times Because