Multiple Choice
Suppose purchasing power parity holds.If in 1997 the price level in the United States is 100,the price level in Japan is 10,000,and the nominal exchange rate is 100 yen per dollar,while in 1998 the price level in Japan rises to 10,500 and the nominal exchange rate rises to 105,then the price level in the United States in 1998 must be
A) 95.
B) 100.
C) 105.
D) 110.25.
Correct Answer:
Verified
Correct Answer:
Verified
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