product sells for $750 in the United States.The exchange rate is $1 to 1.65 Swiss francs.If purchasing power parity (PPP) holds, what is the price of the product in Switzerland?
A)123.75 Swiss francs
B)454.55 Swiss francs
C)750.00 Swiss francs
D)1,237.50 Swiss francs
E)1,650.00 Swiss francs

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) implies that the price of a product should be the same in different countries when expressed in a common currency. Therefore, the price in Switzerland should be $750 multiplied by the exchange rate of 1.65, which equals 1,237.50 Swiss francs.

Product Sells for $750 in the United States