Suppose Absolute Purchasing Power Parity Holds

question 247

Multiple Choice

Suppose absolute purchasing power parity holds. The cost of one kilogram of apples in Canada is C$4.08 and $3.80 in the United States. What is the exchange rate?

• A) C$.7598 per $1US
• B) C$.9314 per $1US
• C) C$1.074 per $1US
• D) C$1.092 per $1US
• E) C$1.124 per $1US

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