Suppose That the Exchange Value of the Dollar Equals 2

question 131

Multiple Choice

Suppose that the exchange value of the dollar equals 2 British pounds.If in San Francisco a computer costs $1,000 and in London it costs 2,000 pounds,then

• A) British consumers will buy computers in San Francisco
• B) Americans will buy computers in London
• C) purchasing power parity prevails
• D) purchasing power parity does not prevail

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