The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2
-Assume that a Chrysler automobile sells for $15,000 in the United States and that the exchange rate is $1 = €1.3. For purchasing power parity to hold, the same car should sell in Germany for:
A) €15,000.
B) €11,538.
C) €19,500.
D) €1,538.
E) €15,500.
Correct Answer:
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