Table 19-1 Assume That the Information in Table 19-1

question 80

Multiple Choice

Table 19-1 Assume that the information in Table 19-1 applies to the cost per ton of coal in 1998. Assume that also over a 10-year period prices rise 100 percent in Great Britain and 200 percent in the United States. According to the purchasing power parity theory, the exchange rate between the dollar and the pound in the year 2008 will be

• A) 1 dollar = 2 pounds.
• B) 1 pound = 2 dollars.
• C) 1 pound = 3 dollars.
• D) 1 dollar = 3 pounds.

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