If the Theory of Purchasing Power Parity Holds,then How Much

question 79

Multiple Choice

If the theory of purchasing power parity holds,then how much does an oil change for a Toyota Prius cost in Japan if the same oil change for the same Toyota Prius costs $29.95 in the United States and the exchange rate is $0.011 per Japanese yen?

• A) It cannot be determined with the given information because oil changes are not tradable.
• B) 2,723 yen
• C) 0.33 yen
• D) 272 yen
• E) 3.29 yen

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Definitions:

Theory Y

A management theory holding that employees are self-motivated, seek responsibility, and can solve work problems creatively.