Two Identical Items Are Manufactured in Both Australia and the USA.Using

question 98

Multiple Choice

Two identical items are manufactured in both Australia and the USA.Using your knowledge of the purchasing power parity theory and the following data,forecast the AUD/USD exchange rate in years 2 and 3. $$\begin{array} { | l | l | l | l | } \hline & \text { Price (AUD) } & \text { Price (USD) } & \text { AUD/USD } \\\hline \text { Year 1 } & \$ 17.50 & \$ 13.60 & 0.7680 \\\hline \text { Year 2 } & \$ 19.25 & \$ 14.28 & ? \\\hline \text { Year 3 } & \$ 19.25 & \$ 14.99 & ? \\\hline\end{array}$$

• A) 0.7296 and 0.7661
• B) 0.8064 and 0.7661
• C) 0.8064 and 0.8467
• D) 0.8448 and 0.8870

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Definitions:

Orbitofrontal Lesions

Damage to the orbitofrontal cortex, which can alter personality and inhibit social and emotional behavior, leading to deficits in decision-making and impulse control.

Dorsolateral Prefrontal Cortex

A region of the brain that plays a crucial role in executive functions, such as working memory, cognitive flexibility, and planning.

Social Responses

Reactions or behaviors in individuals that are influenced by the presence, actions, or expectations of others.

Milk Ejection

The reflexive release of milk from the alveoli of the mammary glands to the ducts leading to the nipple, stimulated by the hormone oxytocin.