Purchasing power parity theory predicts

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Reference no: EM13976893

The purchasing power parity theory "predicts" that if the price of semiconductors in the United States is $3 and the price in Japan is 210 yen for a comparable semiconductor, the exchange rate would be (assume only 1 good is traded, there is no government intervention, and transportation costs are negligible)

A) 180 yen/$.

B) 140 yen/$.

C) 70 yen/$.

D) $/yen 1.45.

Reference no: EM13976893

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