In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?

Related Mcqs:

The relationship between the exchange rate and the prices of tradable goods is known as the ?

A. purchasing power parity theory B. asset markets theory C. monetary theory D. balance of payments theory...

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...

The assets market approach is most helpful in explaining ?

A. why exchange rates remain quite stable B. why governments change their money supplies C. long term exchange rate movements D. short term exchange rate movements...

Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?

A. flow from the United States to foreign countries B. flow from foreign countries to the United States C. remain totally in foreign countries D. remain totally in the United States...

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 ?

A. 0.67 pesos = $1 B. 0.8 pesos = $1 C. 1.25 pesos = $1 D. 1.67 pesos = $1...