The Figure Given Below Depicts the Foreign Exchange Market for British

question 56

Multiple Choice

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

-Suppose purchasing power parity exists in the car stereo market in the United States and Australia. If a car stereo costs $230 in the United States and the exchange rate is $1 = $AUD1.67, the same car stereo may be purchased in Australia for approximately:

• A)$AUD 138.
• B)$AUD 230.
• C)$AUD 2,300.
• D)$AUD 384.
• E)$AUD 108.

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