Suppose Absolute Purchasing Power Parity Holds

question 282

Multiple Choice

Suppose absolute purchasing power parity holds. The cost of one pound of oranges in Mexico is Ps31.07 and in Canada it is $3.25. What is the exchange rate?

• A) Ps0.04 per $1
• B) Ps0.10 per $1
• C) Ps8.10 per $1
• D) Ps9.56 per $1
• E) Ps9.86 per $1

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Definitions:

Sale

A transaction between two parties where the buyer acquires an asset from the seller for a specified amount of money.

Hammers

A tool typically used for driving nails into, or pulling them from, some other object. Generally, it involves a handle and a head.

Percent More

A comparative term describing an increase in quantity or amount expressed as a percentage over a referenced baseline value.

Average Selling Price

The average price at which a particular product is sold across different markets or channels.