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Author Question: What effect do non-tradable goods have on PPP? What will be an ideal ... (Read 73 times)

BRWH

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What effect do non-tradable goods have on PPP?
 
  What will be an ideal response?

Question 2

Eurodollar deposits arising from OPEC trade surpluses are called
 
  A) OECD-dollars.
  B) OPEC-dollars.
  C) petrodollars.
  D) None of the above.



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akpaschal

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Answer to Question 1

The effect is quite substantial.
In 2006, the output of non-tradable goods accounted for about 46 of U.S. GNP. Along with haircuts, non-tradable goods include routine medical treatment, housing etc. For the most part, non-tradable goods are comprised of services, and the output of the construction industry. Non-tradable help explain much of the wide departure from PPP that is present in empirical data.

Answer to Question 2

C




BRWH

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)


kthug

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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