According to Purchasing-Power Parity Theory, If the Same Fast-Food Hamburger

question 124

Multiple Choice

According to purchasing-power parity theory, if the same fast-food hamburger costs $4.00 in Canada and 8 euros in France, what should the nominal exchange rate be?

• A) 1/4 euros per dollar
• B) 1/2 euro per dollar
• C) 1 euro per dollar
• D) 2 euros per dollar

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Definitions:

Iberian Peninsula

A European peninsula located in the southwest corner of Europe, occupied by Spain and Portugal.

Portuguese

Refers to something of, from, or related to Portugal, including its culture, people, or language.

Western Atlantic Trade

A historical trading network across the Atlantic Ocean, primarily involving European countries and their American and African colonies, facilitating the exchange of goods, slaves, and resources from the 16th to the 19th centuries.

Spanish Conquistadors

Explorers and soldiers from Spain who, during the 16th century, conquered large portions of the Americas, including the Aztec and Inca empires.