Which of the following is not an assumption of the Purchasing Power Pa – McqOptions

MCQOPTIONS

1.	Which of the following is not an assumption of the Purchasing Power Parity theory? _
A.	There are no trade barriers between countries
B.	The price index for each of the two countries must be comprised of the same basket of goods
C.	All the prices should be indexed to the same year
D.	Changes in the exchange rate changes internal price level
Answer» E.

Discussion

No Comment Found

Related MCQs

Ricardian theory has _ countries and commodities
No change in technology, no transport cost, constant returns to scale - these assumptions make the Comparative Cost advantage theory __
An Indian farmer produces wheat without incurring cost of inputs alllsells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. Thebaker sells bread to consumers for Rs. 1,600. Total added is Rs.
Piyush s mother is a teacher. She also teaches Piyush. How would you treat this white calculating national income and domestic income ?
Restrictions imposed on the quantity of imports is _ .
Expenditure switching policy is also known as _ _ .
In BOP, total receipts must be equal to total _ .
The current account in the balance of payments _ .
The objective of commercial policy is / are _ .
Look East Policy has now transformed into a _ _.