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Discuss the relationship between PPP and the Law of One Price.
Answer: The law of one price is applies to individual commodities while Purchasing Power Parity applies to the general price level.
Proponents of Purchasing Power Parity argue that its validity in the long run does not require the law of one price to hold exactly. When goods and services provisionally become more expensive in one country than in others the demands for its currency and its products reduce pushing the exchange rate and domestic prices back in line with Purchasing Power Parity and vice versa.
using diagrams, corden''s theory of customs union under conditions of oligopoly and within the existence of external economics of scale.
#question.bhugtan santulan keya hai
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what is this theroy
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