Author Question: Assume that a Chrysler automobile sells for 15,000 in the United States and that the exchange rate ... (Read 68 times)

OSWALD · **on:** Jun 30, 2018

Assume that a Chrysler automobile sells for 15,000 in the United States and that the exchange rate is 1 = 1.3 . For purchasing power parity to hold, the same car should sell in Germany for:
a. 15,000.
b. 11,538.
c. 19,500.
d. 1,538.
e. 15,500.

Question 2

What would be the statistical discrepancy for a current account balance of -85 billion and a capital account balance of 80 billion?
a. -165 billion
b. -5 billion
c. 5 billion
d. 165 billion