Suppose Purchasing Power Parity Holds

question 104

Multiple Choice

Suppose purchasing power parity holds.If the price level in the United States is 100 dollars per good and the price level in Japan is 250 yen per good,then the nominal exchange rate is ________ yen per dollar.

• A)0)25
• B)0)4
• C)2)5
• D)4)0

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Definitions:

Industry-wide bargaining

Collective bargaining negotiations that occur at the industry level, covering all employers and employees within that industry.

Germany

A country in Central Europe known for its rich history, cultural heritage, and significant economic power.

Codetermination

A practice where workers have a say in the management of a company through participation in its boards or committees, promoting more democratic workplace governance.

Employee representation

The practice of workers electing delegates or representatives to discuss and negotiate working conditions, pay, and other employment issues with management.