Question: Suppose purchasing power parity (PPP) depends only on donuts. The exchange rate is C$0.80 = US$1.00 and a dozen donuts in Windsor, Canada costs C$8.00.

Suppose purchasing power parity (PPP) depends only on donuts. The exchange rate is C$0.80 = US$1.00 and a dozen donuts in Windsor, Canada costs C$8.00. PPP suggests that a dozen donuts in Detroit, USA cost A. US$ 8.25. B. US$ 10.00 C. US$ 12.00 D. US$ 6.00 E. US$ 7.00

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