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

Question 97

Multiple Choice

Suppose the same basket of goods costs $100 in the U.S.and 50 pounds in Britain.According to purchasing power parity,what is the nominal exchange rate?


A) 2 pounds per dollar
B) 1 pound per dollar
C) 1/2 pound per dollar
D) None of the above is correct

Correct Answer:

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