Suppose the exchange rate between the dollar and the euro is 2 euros per dollar. The price of a clock in Europe is 20 euros while the price of the same clock in the United States is $5. From these prices and exchange rate, it can be concluded that
A) money buys more in Europe.
B) interest rate parity holds.
C) purchasing power parity holds.
D) money buys more in the United States.

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The Answer of Suppose the exchange rate between the dollar and the euro is 2 euros per dollar. The price of a clock in Europe is 20 euros while the price of the same clock in the United States is $5. From these prices and exchange rate, it can be concluded that
A) money buys more in Europe.
B) interest rate parity holds.
C) purchasing power parity holds.
D) money buys more in the United States.

Suppose the Exchange Rate Between the Dollar and the Euro