Discussion post .

Can you help me understand this Economics question?

Total Points: 100


The questions shown below are intended to help you to master your understanding of concepts and methods of Module 2 – Unit 1. You have to answer each of the 3 questions. Your answers have to be included in your posting . Each student is required to participate as this discussion gives you the opportunity to earn the discussion credits. Postings like, I agree or disagree, yes, no etc. do not count.

  1. What is the Law of One Price? Use your own example to illustrate such law (your example should apply to at least two countries).
  2. Describe the mechanism through which the Law of One Price leads to the Theory of Purchasing Power Parity. What is the Theory of Purchasing Power Parity? Use your example in 1) to support the relationship between the Law of One Price and the Theory of Purchasing Power Parity.
  3. What challenges did you face to answer questions 1 and 2 and how did you overcome them?

* include your references if theres any.

Posted in Uncategorized