According to purchasing-power parity, if the dollar price of oil is higher in New York than in London, arbitrageurs will ___ oil

Question

2 years ago

15

in New York and _____ oil in London to drive _____ the price of oil in New York.

1 answer:

kolbaska11 [484] · Answer 1 · 2022-07-20T08:09:05+03:00

Answer:

SELL, BUY, DOWN.

Explanation:

The answer to the fill in the blanks will be SELL, BUY, DOWN.

If the dollar price of oil is higher in any country then what arbitrageurs will do is he will sell oil in country which has a high dollar value.

And will buys oil from the country where the dollar value is less and this process will drive down the price of oil.