Suppose a McDonald's Big Mac costs 29 pesos in Mexico, and the exchange rate between the peso and the Canadian dollar is 10 pesos per Canadian dollar. According to purchasing power parity, a Canadian Big Mac should cost:
A) 0.34 Canadian dollars.
B) 2.90 Canadian dollars.
C) 5.80 Canadian dollars.
D) 290 Canadian dollars.
Correct Answer:
Verified
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