In February 2022 the €/$ (euro/dollar) exchange rate was 0.88€/$. In France, a country that uses Euros as currency, the average price of the game Monopoly was €22, while in the United States, a country that uses dollars as currency, the average price of the game Monopoly was $25. From this information we can infer that: Select one answer: O The exchange rate is too high. The euro should appreciate to ensure that purchasing power parity holds. The exchange rate is too low. The euro should appreciate to ensure that purchasing power parity holds. O The exchange rate is too low. The dollar should appreciate to ensure that purchasing power parity holds. The exchange rate is approximately correct. Purchasing power parity holds.
In February 2022 the €/$ (euro/dollar) exchange rate was 0.88€/$. In France, a country that uses Euros as currency, the average price of the game Monopoly was €22, while in the United States, a country that uses dollars as currency, the average price of the game Monopoly was $25. From this information we can infer that: Select one answer: O The exchange rate is too high. The euro should appreciate to ensure that purchasing power parity holds. The exchange rate is too low. The euro should appreciate to ensure that purchasing power parity holds. O The exchange rate is too low. The dollar should appreciate to ensure that purchasing power parity holds. The exchange rate is approximately correct. Purchasing power parity holds.
Chapter6: Government Influence On Exchange Rates
Section: Chapter Questions
Problem 4ST
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8. Please Solve the answer can u see in option im needed max in 15-20 minutes thank u
Transcribed Image Text:In February 2022 the E/$ (euro/dollar) exchange rate was 0.88€/$. In France, a country that uses Euros as
currency, the average price of the game Monopoly was €22, while in the United States, a country that uses dollars
as currency, the average price of the game Monopoly was $25. From this information we can infer that:
8
Select one answer:
O The exchange rate is too high. The euro should appreciate to ensure that purchasing power parity holds.
O The exchange rate is too low. The euro should appreciate to ensure that purchasing power parity holds.
O The exchange rate is too low. The dollar should appreciate to ensure that purchasing power parity holds.
The exchange rate is approximately correct. Purchasing power parity holds.
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