Your favourite golf shoes cost US$89 in the US while the identical shoes cost A$110.00 in Australia.According to purchasing power parity,what is one Australian dollar worth?

Question

Quizplus · Accepted Answer

Purchasing power parity implies that the exchange rate should equalize the price of identical goods in different countries. Therefore, US$89 should equal A$110. The exchange rate is calculated as 89/110 = 0.8091, meaning one Australian dollar is worth US$0.8091.

Your Favourite Golf Shoes Cost US$89 in the US While