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Suppose Purchasing Power Parity (PPP) Depends Only on Hamburgers

Question 244

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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 and US$1.50 in the U.S. PPP suggests that the Canadian dollar is overvalued.

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