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:

General Journal

An initial record where all transactions are first entered, providing a chronological order of all financial transactions made by a business.

Chronological Record

A record of events in the order they occurred over time.

Transactions

In finance and business, transactions refer to the exchange or transfer of goods, services, or funds between two or more parties.

Cash Register Sales Tape

A continuous roll of paper used in cash registers to record sales transactions, providing a real-time sales record.