Suppose a Starbucks Tall Latte Cost $4

question 13

Multiple Choice

Suppose a Starbucks tall latte cost $4.00 in the United States, 5.00 euros in the euro area and $2.50 Australian dollars in Australia. Nominal exchange rates are .80 euros per dollar and 1.4 Australian dollars per U.S. dollar. Where does purchasing-power parity hold?

• A) both the euro area and Australia
• B) the euro area but not Australia
• C) Australia but not the euro area
• D) neither the euro area or Australia

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Definitions:

Compensation

The complete sum of cash and non-cash compensation given to an employee by an employer in exchange for the work done as requested.

Internal Marketing

The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers.

Customer Experience Management

A business strategy focused on managing and improving the entire customer experience across various touchpoints and interactions.

Public Service Announcement

A message broadcast on television, radio, or online intended to inform the public about a topic of public interest without commercial benefit.