The Next Questions Refer to the Following

question 20

Multiple Choice

The next questions refer to the following.
Suppose prices in the US are twice as high as those in England, but the US interest rate is 4% while the interest rate in England is 8%. No inflation is expected in either country.
-In the long run,PPP theory predicts that the exchange rate should be

• A) $1.04 = £2.16
• B) $1 = £2
• C) £1 = $2
• D) £1.08 = $2.08
• E) £1.04 = $2.08

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Definitions:

Descriptive

Relating to the process of describing, illustrating, or detailing the characteristics of a dataset.

Average Age

The mean age of a group of individuals, calculated by dividing the sum of their ages by the number of individuals.

Median

The middle value in a data set, which divides the data into two halves.

Descriptive Statistics

Statistical measures that summarize and describe the features of a collection of information, such as mean, median, and mode.