Suppose the Price of a Burger Is $4

question 12

Multiple Choice

Suppose the price of a burger is $4.50 Canadian in Toronto, and the exchange rate is 103 U.S. cents per Canadian dollar. Then

• A)the price of a burger is $4.50 U.S. in New York if purchasing power parity holds.
• B)the price of a burger is $4.64 U.S. in New York if interest rate parity holds.
• C)the price of a burger is $4.64 U.S. in New York if purchasing power parity holds.
• D)the Canadian dollar is expected to appreciate according to purchasing power parity.
• E)the Canadian dollar is expected to depreciate according to purchasing power parity.

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Definitions:

Coupling Phase

The stage in the process of connecting two shafts or units together so that they rotate in unison, crucial for mechanical power transmission.

Front Cover

Front Cover, in automotive contexts, often refers to a component that seals the front part of the engine, sometimes housing elements like the timing chain and gear, and ensuring they are protected and lubricated.

Lock-up Clutch

A mechanism in automatic transmissions that locks the engine directly to the transmission at cruising speed to improve fuel efficiency and performance.

Coupling Ratio

in engineering, refers to the relationship between the input and output of a system, such as in transformers or gear ratios.