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

Question

Quizplus · Accepted Answer

The law of one price states that identical goods should have the same price in different markets, assuming no manipulation or transportation costs. Since the camera in New York retails for $300, the equivalent price in euros would be €250 (as €1 = $1.20). Thus, the correct answer is C) €250.

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