Suppose the price of a burger is $4.50 Canadian in Toronto, and the exchange rate is 0.90 U.S.cents per Canadian dollar.Then
A) the Canadian dollar is expected to appreciate according to interest rate parity.
B) the price of a burger is $4.50 U.S.in New York if purchasing power parity holds.
C) the price of a burger is $4.64 U.S.in New York if purchasing power parity holds.
D) the Canadian dollar is expected to depreciate according to interest rate parity.
E) the price of a burger is $4.05 U.S.in New York if purchasing power parity holds.
Correct Answer:
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