Purchasing power parity holds better in the long run than in the short run.

Name: Purchasing power parity holds better in the long run than in the short run.
Brand: Quizplus
Rating: 4.9 (36 reviews)

Question

Quizplus · Accepted Answer

Purchasing Power Parity (PPP) tends to hold better in the long run because prices and exchange rates have more time to adjust to differences in inflation rates between countries, aligning the cost of goods and services across borders. In the short run, these adjustments may not occur as quickly due to market frictions and other factors.

Purchasing Power Parity Holds Better in the Long Run Than