If Purchasing Power Parity Holds, a Bushel of Rice Costs

question 128

Multiple Choice

If purchasing power parity holds, a bushel of rice costs $10 in the U.S., and the nominal exchange rate is 40 Thai baht per dollar, what is the price of rice in Thailand?

• A)400 baht
• B)200 baht
• C)100 baht
• D)40 baht

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Definitions:

Disruptive Selection

Mode of natural selection in which forms of a trait at both ends of a range of variation are adaptive, and intermediate forms are selected against.

Hybrid Sterility

A condition in hybrids between different species where the offspring are sterile, unable to produce viable gametes.

Viable Gametes

Sex cells (sperm and eggs) that are capable of fertilization and development into a new organism.

Reproductive Maturity

The stage in an organism's life cycle when it becomes capable of producing offspring.