If Purchasing-Power Parity Held,if a Big Mac Costs $2 in Canada,and

question 119

Multiple Choice

If purchasing-power parity held,if a Big Mac costs $2 in Canada,and if 10 Mexican pesos trade for $1 Canadian dollar,then a Big Mac in Cancun,Mexico should cost:

• A) 2 pesos.
• B) 5 pesos.
• C) 10 pesos.
• D) 20 pesos.

---

Definitions:

Stockholders' Claims

The rights of shareholders to a corporation's assets after all debts have been paid.

Assets

Resources owned by a company or individual, expected to bring future economic benefits.

Face Amount

The face amount is the value of a financial instrument, such as a bond or life insurance policy, as stated on the instrument itself.

Interest Payments

Payments made periodically, often annually or semi-annually, as compensation for borrowing money, calculated as a percentage of the total amount borrowed.