A product sells for $750 in the United States. The exchange rate is such that $1 equals 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

If PPP holds, the price in Switzerland should be $750 * 1.65 = 1,237.50 Swiss francs.

A Product Sells for $750 in the United States