Suppose a Starbucks Tall-Latte Cost $4

question 28

Multiple Choice

Suppose a Starbucks tall-latte cost $4.00 in the United States and 3.20 euros in the Euro area.Suppose a McDonald's Big Mac costs $3.50 in the United States and 2.45 euros in Euro area.If the nominal exchange rate is .80 euros per dollar,which goods have prices that are consistent with purchasing power parity?

• A)Both the tall-latte and the Big Mac.
• B)Neither the tall-latte nor the Big Mac.
• C)The tall-latte but not the Big Mac.
• D)The Big Mac but not the tall-latte.

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Definitions:

Heart Rate

The number of heartbeats per unit of time, typically expressed as beats per minute (BPM).

Endorphins

Natural chemicals in the body that interact with the brain's receptors to reduce pain and boost happiness, often referred to as the body's natural painkillers.

Runner's High

A euphoric state often experienced by long-distance runners, attributed to the release of endorphins.

Epileptic Seizure

A sudden surge of electrical activity in the brain, leading to various symptoms such as convulsions and loss of consciousness.