Suppose Purchasing Power Parity Exists in the Car Stereo Market

question 104

Multiple Choice

Suppose purchasing power parity exists in the car stereo market in the United States and Australia. If a car stereo costs $230 in the United States and the exchange rate is $1 = $AUD₁.67, the same car stereo may be purchased in Australia for approximately:

• A) $AUD 138.
• B) $AUD 230.
• C) $AUD 2,300.
• D) $AUD 384.
• E) $AUD 108.

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Definitions:

Special Ledger

A ledger used to record and track transactions of a specific nature, separate from the general ledger.

Accounting Systems

Frameworks used to collect, monitor, and interpret financial information of an organization or individual.

Chart Of Accounts

This is a listing of all the accounts in the general ledger, each account accompanied by a reference number.

Listing

The action of recording or including an item, such as a property or stock, for sale within a public marketplace or directory.