When McDonald's First Opened Their Restaurants in Russia in 1990

question 103

Multiple Choice

When McDonald's first opened their restaurants in Russia in 1990, the Big Mac meal cost 6 rubles.Three years later, the same meal cost 1,100 rubles.This would be an example of how:

• A)demand can change.
• B)how premium pricing can damage a product.
• C)price elasticity works.
• D)inflation can damage a market.
• E)service is what matter the most to the average customer.

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Definitions:

Purchasing-Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, to assess the relative value of each currency.

Inflation Rate

An upward shift in the overall price levels of goods and services within an economy throughout a specified period.

Real Exchange Rate

The rate at which one country's currency can be exchanged for another's, adjusted for inflation, reflecting the buying power between the two currencies.

Arbitragers

Individuals or entities that seek to profit from price discrepancies of the same asset in different markets or forms.