The law of one price does not apply to Big Macs, because an American will not travel to Argentina to buy a hamburger for lunch.
- Essential Statistics, Regression, and Econometrics
- from Essential Statistics, Regression, and Econometrics
- Publisher: Academic Press
- Released: November 2011
What the author wants to stress here is that the one price objective which is indicative of efficient markets holds only for goods which might otherwise, lead to inter-country trade(For ex:- textiles. However, a person living in Argentina won't order a big Mac,i.e., snack from USA just because the price is different in Argentina)
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