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Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0077332648Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0077332648 Exercise 33
In Windsor, Ontario, a Big Mac from McDonald's costs C$4.16 (Canadian dollars), and across the border in Detroit it costs $3.54 in U.S. dollars.
a. Suppose the nominal U.S. exchange rate with Canada is US$0.80 per Canadian dollar. Does purchasing power parity hold between the two countries?
b. What is the purchasing power parity exchange rate for the U.S.?
a. Suppose the nominal U.S. exchange rate with Canada is US$0.80 per Canadian dollar. Does purchasing power parity hold between the two countries?
b. What is the purchasing power parity exchange rate for the U.S.?
Explanation
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Given Information:
• The cost of BM in ...
Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch
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