Purchasing Power Parity A computer costs $620 in the United States. The same model costs 775...
Purchasing Power Parity
A computer costs $620 in the United States. The same model costs 775 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Do not round intermediate calculations. Round your answer to two decimal places.
Homework Answers
Spot exchange rate as per purchasing power parity = Price of computer in France/Price of computer in US
= 775 euros/620 $
I.e. Euro 1.25/dollar
I.e. Euro 1.25/$
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Purchasing Power Parity
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