The rule which states that similar set of goods and services produced in various countries should have equal price is classified as _____________?
Correct answer: D. law of one price
- A. law of similar mortgage rate
- B. law of one type manufacturing
- C. law of similar labor rules
- D. law of one price
Explanation
The law of one price states that identical goods should sell for the same price in different markets after allowing for exchange rates and transaction costs. It is a foundation of purchasing-power-parity analysis.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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