A bottle of German wine costs $21 euros in Berlin. According to the purchasing power parity theory,
Fantastic news! We've Found the answer you've been seeking!
Question:
A bottle of German wine costs $21 euros in Berlin. According to the purchasing power parity theory, what would the bottle sell for in New York if it costs the New York company $1.25 per bottle to transport the wine to the United States? Assume the exchange rate is $1.32 per euro.
Select one:
a. $27.22
b. $39.50
c. $40.54
d. $28.97
Related Book For
Financial Markets and Institutions
ISBN: 978-0077861667
6th edition
Authors: Anthony Saunders , Marcia Cornett
Posted Date: