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Suppose the Same Basket of Goods Costs $100 in the U.S.and

Question 22

Multiple Choice

Suppose the same basket of goods costs $100 in the U.S.and 50 pounds in Britain.According to purchasing power parity,if the two countries' price levels do not change,what will be the exchange rate?


A) 2 dollars/pound
B) 4 dollars/pound
C) 5 dollars/pound
D) 0.50 dollars/pound
E) 50 dollars/pound

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