People are unlikely to buy Big Macs in the places where they are relatively cheap (according to purchasing power parity) and sell them where they are relatively more expensive, in order to make a profit because:

Respuesta :

Answer: In the long run, prices will be the same.

Explanation: Purchasing power parity (PPP) is a theory that means that in the long run, exchange rates between countries would be the same and similar goods will cost the same amount in both countries. Purchasing Power Parity shows that there should be no opportunities where the differences in price between different countries can lead to profit. The gross domestic product between countries is compared by using the purchasing power parity.

Purchasing power parity is based on the law of one price which means that the price of all identical goods should be the same. Hence, it us unlikely that people buy Big Macs in countries where they're cheaper and sell at countries where there price is higher.

Hope this helps.