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Following statements are pertaining to the theory of Purchasing power parity. Determine the incorrect statement. a. PPP states that price level should be equal worldwide
Following statements are pertaining to the theory of Purchasing power parity. Determine the incorrect statement. a. PPP states that price level should be equal worldwide when expressed in common currency. b. PPP was first stated by Swedish Economist Gustav Cassel in 1918 C. PPP ignores the effect of transportation costs and tariffs on free trade d. PPP is widely used by Commercial Banks as a guide for fixing the exchange rate with foreign currency
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