Suppose Purchasing Power Parity (PPP) Depends Only on Hamburgers

question 79

Multiple Choice

Suppose purchasing power parity (PPP) depends only on hamburgers. The exchange rate is C$1.00 = US$0.80 and hamburger prices are C$2.00 in Canada and US$1.80 in the U.S. PPP suggests that the

• A) demand for Canadian dollars will decrease.
• B) Canadian dollar is overvalued.
• C) Canadian dollar is undervalued.
• D) supply of Canadian dollars will increase.
• E) supply of U.S. dollars will increase.

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Definitions:

Asthenia

An abnormal physical weakness or lack of energy; often associated with various medical conditions.

Ataxia

Lack of coordination or unsteady movement, often due to a neurological disorder.

Bradykinesia

Slowness of movement, which is a common symptom in neurological disorders such as Parkinson's disease.

Craniectomy

A surgical operation that involves taking out part of the skull to reduce pressure on the brain.