The euro/dollar exchange rate is €1 = $1.20. According to the law of one price, how much would a camera that retails for $300 in New York sell for in Germany?

Question

Quizplus · Accepted Answer

According to the law of one price, the camera should sell for the same amount in euros as it does in dollars when converted at the exchange rate. At €1 = $1.20, $300 is equivalent to €250 (€300 = $300 / 1.20).

The Euro/dollar Exchange Rate Is €1 = $1