The Figure Given Below Depicts the Foreign Exchange Market for British

question 7

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Assume that a Chrysler automobile sells for $15,000 in the United States and that the exchange rate is $1 = €1.3. For purchasing power parity to hold, the same car should sell in Germany for:

• A)€15,000.
• B)€11,538.
• C)€19,500.
• D)€1,538.
• E)€15,500.

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Definitions:

Restrictive Policy

A policy designed to limit or restrict certain behaviors, actions, or practices, typically in a financial or regulatory context.

Marketable Securities

Short-term financial instruments that are easily convertible into cash at a relatively stable market price.

Flexible Policy

A strategy or guideline that allows for adjustments and adaptations in response to changing conditions or information.

Payables Manager

A financial professional responsible for managing a company's accounts payable, ensuring timely payment of invoices and maintaining vendor relationships.