Multiple Choice
According to purchasing-power parity theory, if a McDonald's Big Mac cost U.S. $2.50 in the United States and 5 euros in France, what should the nominal exchange rate be?
A) 2 euros per U.S. dollar
B) 1 euro per U.S. dollar
C) 1/2 euro per U.S. dollar
D) 1/4 euro per U.S. dollar
Correct Answer:
Verified
Correct Answer:
Verified
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