How much is the exchange rate

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Consider the arbitrage. Suppose that the same PC is sold in Tokyo and Osaka. But the price of the PC in Tokyo is Y100,000 and the price in Osaka is Y80,000. This price difference started arbitrage. Answer which would the arbitrage increase in Osaka: Supply of PC or Demand of PC, and in Tokyo: Supply of PC or Demand of PC: Osaka: Tokyo: 3. Home price level is PH = 50cH. Foreign price level is 40cF. If the purchasing power parity holds, how much is the exchange rate?

Reference no: EM133084454

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