Question

In view of the fact that PPP is the manifestation of the law of one price applied to a standard commodity basket, Multiple Choice it will hold only if the prices of the constituent commodities are equalized across countries in a given currency. it will hold only if the composition of the consumption basket is the same across countries. it will hold only if the prices of the constituent commodities are equalized across countries in a given currency or if the composition of the consumption basket is the same across countries. none of the options

Answer 1

Step-by-step explanation:

In view of the fact that PPP is the manifestation of the law of one price applied to a standard commodity basket:

it will hold only if the prices of the constituent commodities are equalized across countries in a given currency.

it will hold only if the composition of the consumption basket is the same across countries