Multiple Choice
Suppose that a typical basket of goods costs 400 pesos in Mexico and 25 pounds in Britain: the market exchange rate is 25 pesos per pound. Using purchasing power parity, the appropriate exchange rate for comparing the incomes of the two countries is:
A) 0.25 pesos per pound.
B) 10 pesos per pound.
C) 16 pesos per pound.
D) 25 pesos per pound.
Correct Answer:
Verified
Correct Answer:
Verified
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