An article of clothing costs 40 euro in Finland and 50 US$ in the US. The exchange rate of the US dollar to the euro is

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

An article of clothing costs 40 euro in Finland and 50 US$ in the US. The exchange rate of the US dollar to the euro is

Post by answerhappygod »

An article of clothing costs 40 euro in Finland and 50 US$ in
the US. The exchange rate of the US dollar to the euro is 1.25 US$
to one euro. Does the purchasing power theory hold in this case? If
so, why? If not, which economic forces could operate to make the
theory hold? (maximum 150 words).
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”