[LINE][LINE]A pair of K's woolen gloves sells for C$38.50 in Toronto. If purchasing power parity exists, what is the price of the gloves in Sydney?

Question

Quizplus · Accepted Answer

Purchasing power parity implies that the price of goods should be the same in different countries when expressed in a common currency. Therefore, the price of the gloves in Sydney should be the same as in Toronto, which is C$38.50. Converting this to Australian dollars using the exchange rate would give the equivalent price in Sydney.

[LINE][LINE]A Pair of K's Woolen Gloves Sells for C$38