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List four reasons why deviations from PPP might occur and explain carefully how each might cause such deviations

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This solution explains in detail four reasons why deviations from PPP might occur and explain carefully how each might cause such deviations. Reference is also included.

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List four reasons why deviations from PPP might occur and explain carefully how each might cause such deviations

Four Reasons:
1. Transaction costs involve in the exchange.
If the two parties want to exchange cars, they might be identical, but it will be difficult to ship the cars. Therefore, transaction costs such as shipping and insurance will involve, which disagrees with the PPP ...

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