Question: Which of the following describe some limitations of the purchasing-power-parity theory? Check all that apply.
- The theory does not apply well to globally tradable commodities such as oil and metals.
- The theory does not appear to apply well to non-tradable goods and personal services like haircuts.
- The theory suffers from the choice of an appropriate price index used in price calculations.
- The theory does not consider the impact of international capital movements.