Your favorite running shoes cost $89 in the U.S. while the identical shoes cost C$114.50 in Canada. According to purchasing power parity, what is the C$/$ exchange rate?

Name: Your favorite running shoes cost $89 in the U.S. while the identical shoes cost C$114.50 in Canada. According to purchasing power parity, what is the C$/$ exchange rate?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Purchasing power parity implies that the exchange rate should equal the ratio of the prices in the two countries. Thus, C$114.50/$89 = C$1.2865/$1.

Your Favorite Running Shoes Cost $89 in the U