Multiple Choice
Suppose a Starbucks tall-latte cost $4.00 in the United States and 3.20 euros in the Euro area.Suppose a McDonald's Big Mac costs $3.50 in the United States and 2.45 euros in Euro area.If the nominal exchange rate is .80 euros per dollar,which goods have prices that are consistent with purchasing power parity?
A) Both the tall-latte and the Big Mac.
B) Neither the tall-latte nor the Big Mac.
C) The tall-latte but not the Big Mac.
D) The Big Mac but not the tall-latte.
Correct Answer:
Verified
Correct Answer:
Verified
Q21: Which of the following could be a
Q23: A country's trade balance<br>A)must be zero.<br>B)must be
Q29: Which of the following is an example
Q65: After 1980 in the United States,<br>A)national saving
Q66: If you go to the bank and
Q90: An open economy's GDP is always given
Q128: What is the logic behind the theory
Q211: A country has a trade deficit.Its<br>A)net capital
Q248: Catherine, a citizen of Spain, decides to
Q321: Suppose a bottle of wine costs 25