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Q. What effect do non-tradable goods have on PPP?
Answer: The consequence is quite substantial. In 1997 the production of non-tradable goods accounted for about 55% of U.S GNP. Together with haircuts non-tradable goods include housing, routine medical treatment and so on. For the nearly all parts non-tradable goods are comprised of services and the output of the construction industry. Non-tradable assists explain much of the wide departure from PPP that is present in empirical data.
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Q. Show that the image frequency for an FM station does not fall in the range of 88.1-107.9 MHz, regardless of the choice of high- or low-side local oscillator.
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