Multiple Choice
The table below shows indexes for the price levels for Canada and the United States and the nominal exchange rate between their currencies (the Canadian-dollar price of 1 U.S.dollar) .
TABLE 34-2
-Refer to Table 34-2.According to the theory of purchasing power parity (PPP) ,the Canada-US exchange rate in 2008 should have been
A) 115/122 = 0.94.
B) 1.15,the actual exchange rate that year.
C) (122 × 115) /100 = 140.3.
D) 122,the price level in Canada that year.
E) 122/115 = 1.06.
Correct Answer:
Verified
Correct Answer:
Verified
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