A new sweater costs SF67 in Switzerland.Assume SF1 = $1.0563 and €1 = $1.2195.How much will the identical sweater cost in euros if absolute purchasing power parity exists?

Question

Quizplus · Accepted Answer

First, convert the price of the sweater from Swiss Francs (SF) to US Dollars (USD) using the given exchange rate: SF67 * $1.0563/SF = $70.7721. Then, convert this amount to Euros (€) using the given exchange rate: $70.7721 / $1.2195/€ = €58.03.

A New Sweater Costs SF67 in Switzerland