Assuming the theory of purchasing power parity holds, if the exchange rate between the United States and Europe is $1.33 per euro, then how much does a $ € $ 35 bottle of French champagne cost in U.S. dollars?

Question

Quizplus · Accepted Answer

To convert the cost in euros to dollars, we need to multiply the cost in euros by the exchange rate ($1.33/euro). 
Cost in dollars = Cost in euros x Exchange rate 
Cost in dollars = 35 euros x $1.33/euro = $46.55 
Therefore, a F1F1F1S1ႬF1F1F1035 bottle of French champagne costs $46.55 in U.S. dollars.

Assuming the Theory of Purchasing Power Parity Holds, If the Exchange