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Author Question: A Big Mac costs $3 in the United States and 2 euros in Spain. The purchasing power parity theory ... (Read 47 times)

go.lag

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on: Apr 19, 2019

Question 1

Suppose that the price of a plasma TV is $1,200 in the United States and 13,200 pesos in Mexico. If the current exchange rate is 10 pesos to the dollar, then purchasing power parity theory would predict that in the long run


◦ Mexico will begin to import plasma TVs from the United States.
◦ the exchange value of the peso will depreciate.
◦ the exchange value of the peso will appreciate.
◦ the exchange value of the dollar will depreciate.

Question 2

A Big Mac costs $3 in the United States and 2 euros in Spain. The purchasing power parity theory would predict that the exchange rate in the long run is


◦ $1 = 1.5 euros.
◦ $1 = 0.67 euro.
◦ $1 = 6 euros.
◦ 1 euro = $0.67.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by go.lag on Apr 19, 2019

CAPTAINAMERICA

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Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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go.lag

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Reply #2 on: Apr 19, 2019
Thanks


CAPTAINAMERICA

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Reply #3 on: Apr 19, 2019
Welcome :)


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