Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?

Related Mcqs:

Relatively high real interest rates in the United States tend to ?

A. decrease the foreign demand for dollars causing the dollar to depreciate B. decrease the foreign demand for dollars causing the dollar to appreciate C. increase the foreign demand for dollars causing the dollar to depreciate D. increase the foreign demand for dollars causing the dollar to appreciate...

When the price of foreign currency (i.e the exchange rate) is below the equilibrium level ?

A. an excess demand for that currency exists in the foreign exchange market B. an excess supply of the currency exists in the foreign exchange market C. the demand for foreign exchange shifts outward to the right D. the demand for foreign exchange shifts backward to the left...

Relatively low real interest rates in the United States tend to ?

A. decrease the foreign demand for dollars causing the dollar to depreciate B. decrease the foreign demand for dollars causing the dollar to appreciate C. increase the foreign demand for dollars causing the dollar to depreciate D. decrease the foreign demand for dollars causing the dollar to appreciate...

Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?

A. appreciate by 8 percent against the yen B. depreciate by 8 percent against the yen C. remain at its existing exchange rate None of the above...

IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?

A. $50 per pound B. $1.00 per pound C. $2.00 per pound D. $8.00 per pound...