If Purchasing Power Parity Holds, a Bushel of Rice Costs

question 128

Multiple Choice

If purchasing power parity holds, a bushel of rice costs $10 in the U.S., and the nominal exchange rate is 40 Thai baht per dollar, what is the price of rice in Thailand?

• A)400 baht
• B)200 baht
• C)100 baht
• D)40 baht

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