Suppose the Same Basket of Goods Costs $100 in the U.S.and

question 97

Multiple Choice

Suppose the same basket of goods costs $100 in the U.S.and 50 pounds in Britain.According to purchasing power parity,what is the nominal exchange rate?

• A)2 pounds per dollar
• B)1 pound per dollar
• C)1/2 pound per dollar
• D)None of the above is correct