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    Modern Principles Macroeconomics
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    Exam 20: International Finance
  5. Question
    If Purchasing Power Parity Holds and the Nominal Exchange Rate
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If Purchasing Power Parity Holds and the Nominal Exchange Rate

Question 2

Question 2

Multiple Choice

If purchasing power parity holds and the nominal exchange rate is £1 for $2,then an iPhone that cost $450 in New York should cost _____ in London.


A) £225
B) £450
C) £675
D) £900

Correct Answer:

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