If a cup of coffee costs 2 euros in Paris and $6 inNew York and purchasing-power parity holds, what isthe exchange rate?a. 1/4 euro per dollarb. 1/3 euro per dollarc. 3 euros per dollard. 4 euros per dollar
If a cup of coffee costs 2 euros in Paris and $6 inNew York and purchasing-power parity holds, what isthe exchange rate?a. 1/4 euro per dollarb. 1/3 euro per dollarc. 3 euros per dollard. 4 euros per dollar
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If a cup of coffee costs 2 euros in Paris and $6 in
New York and purchasing-power parity holds, what is
the exchange rate?
a. 1/4 euro per dollar
b. 1/3 euro per dollar
c. 3 euros per dollar
d. 4 euros per dollar
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