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Suppose Purchasing Power Parity (PPP) Depends Only on Hamburgers

Question 158

Multiple Choice

Suppose purchasing power parity (PPP) depends only on hamburgers. The exchange rate is C$1.00 = US$0.80 and hamburger prices are C$2.00 in Canada. PPP suggests that the price of a hamburger in the U.S. should be


A) US$ 1.25.
B) US$ 2.00.
C) US$ 2.50.
D) US$ 1.60.
E) US$ 0.80.

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