Alicia has $5 which is the exact cost of a hamburger in Halifax today. If absolute purchasing power parity exists, then Alicia:
A) Can go to any other country and buy a hamburger for exactly 5 units of that country's currency.
B) Can go to any country whose currency is selling at a premium to the dollar, exchange her money, buy a hamburger, and have change left over.
C) Can buy the same hamburger in Halifax for exactly $5 one year from now.
D) Can exchange her money into any other currency, buy a hamburger in the country whose currency she holds, and have exactly the amount of money needed to pay for the
Purchase.
E) Can take her $5, go to New York, buy the hamburger, and return with change left over.
Correct Answer:
Verified
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