Suppose Purchasing Power Parity (PPP) Depends Only on Hotel Rooms

Multiple Choice

Suppose purchasing power parity (PPP) depends only on hotel rooms. The exchange rate is C$1.00 = US$0.80 and a room at the Weston Hotel in Niagara Falls, Ontario costs C$200. PPP suggests that the price of a room at the Weston Hotel in Niagara Falls, New York should be

A) US$ 80.
B) US$ 200.
C) US$ 250.
D) US$ 125.
E) US$ 160.