Multiple Choice
A Big Mac costs $3 in the United States and 50 pesos in Mexico. The purchasing power parity theory would predict that the exchange rate in the long run is
A) $1 = 6 pesos.
B) $1 = 16.67 pesos.
C) $1 = 0.06 pesos.
D) 1 peso = $1.50.
Correct Answer:
Verified
Correct Answer:
Verified
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