Assume that PE is the euro price of a product, PUS is the U.S.price of the identical product, and S0 is the spot exchange rate, quoted as the amount of foreign currency per dollar.Given this, which one of the following correctly expresses absolute purchasing power parity?
A) PUS = S0/PE
B) PUS = S0 *PE
C) PUS = S0 + PE
D) PE = S0/PUS
E) PE = S0 *PUS
Correct Answer:
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