Consider the Following Spot Exchange Rates: $2 $\le$ , *6562/$, DM1 $\le$

question 61

Multiple Choice

Consider the following spot exchange rates: $2.56/ $\le$ , *65.62/$, DM1.0/$, and L1,263/$.Which of the following seems to violate the law of one price if gold sells for $464 per ounce in the Canada? Dollars in the exchange rates are Canadian.

• A)1 troy oz.gold = \(\le\)181,250
• B)1 troy oz.gold = *1030,448
• C)1 troy oz.gold = DM464
• D)1 troy oz.gold = L550,500

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Definitions:

Disposable Income

The amount of income left for spending or saving after taxes have been paid.

C + I

Represents the sum of consumer spending (C) and investment spending (I) in an economy's GDP formula.

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A metric used to measure the degree to which a firm or economy is operating at its full potential or maximum efficiency.

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The action or process of allocating resources, usually money, in order to generate income or profit.