A Particular Brand of Toothpaste Costs 4 British Pounds in London.The

question 47

Multiple Choice

A particular brand of toothpaste costs 4 British pounds in London.The nominal exchange rate is .80 and the real exchange rate is about 1.16.These numbers imply that the U.S.price of the same toothpaste is about

• A)$5.79
• B)$4.29
• C)$3.70
• D)$2.76

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Definitions:

Initial Endowment

The initial allocation of resources, goods, or wealth with which individuals or entities start in an economic model or real-life scenario.

Competitive Equilibrium

A market state where supply equals demand, leaving no incentive for price changes.

Demand Equals Supply

A market condition where the quantity of goods desired by buyers matches the quantity of goods produced by sellers, leading to market equilibrium.

Initial Endowment

Refers to the initial allocation of resources, such as money, property, or goods, that an individual or entity possesses.