Suppose the exchange rate between the Canadian dollar and the British pound is 0.5 pounds per dollar. If a radio sells for 38 pounds in Britain and purchasing power parity holds, what is the dollar price of the radio?
A)$19
B)$26
C)$38
D)$57
E)$76

Question

Quizplus · Accepted Answer

Purchasing power parity implies that the price of goods should be the same in different countries when expressed in a common currency. At an exchange rate of 0.5 pounds per dollar, 38 pounds is equivalent to 38 / 0.5 = 76 dollars.

Suppose the Exchange Rate Between the Canadian Dollar and the British