A Big Mac costs $4 in the United States and 3 euros in Portugal. The purchasing power

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A Big Mac costs $4 in the United States and 3 euros in Portugal. The purchasing power parity theory would predict that the exchange rate in the long run is

A.$1 = 1.33 euros.

B. $1 = 12 euros.

C. 1 euro = $0.75.

D. $1 = 0.75 euros.

Related Book For answer-question

Macroeconomics Principles Applications And Tools

ISBN: 9780134089034

7th Edition

Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez

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Posted Date: Jan 08, 2024 05:55 AM

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A Big Mac costs $4 in the United States and 3 euros in Portugal. The purchasing power

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The purchasing power parity PPP theory states that in the absence of transactio... View the full answer

Macroeconomics Principles Applications And Tools

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