Assuming the Theory of Purchasing Power Parity Holds,what Is the Exchange

question 51

Multiple Choice

Assuming the theory of purchasing power parity holds,what is the exchange rate between the United States and Mexico if the price of an avocado is $1.50 in the United States and 15.5 pesos in Mexico?

• A) 0.10 pesos per dollar
• B) 1.33 pesos per dollar
• C) 10.33 pesos per dollar
• D) 23.50 pesos per dollar
• E) 3.14 pesos per dollar

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Definitions:

Radical Equation

A mathematical equation that involves a radical, where the variable is inside a root, such as a square root or cube root.

Graphing Calculator

A handheld or software tool that plots graphs, solves equations, and performs other mathematical calculations.

Pythagorean Theorem

A fundamental relation in Euclidean geometry among the three sides of a right triangle, stating that the square of the hypotenuse is equal to the sum of the squares of the other two sides.

Radical Equation

An equation in which the variable is contained within a radical symbol or has a radical expression with the variable.