2. Assume that the prices of a standard basket of goods and services in different countries are...

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2. Assume that the prices of a standard basket of goods and services in different countries are as follows

• United States $400

• Canada C$500

• United Kingdom £220 • Japan ¥60,000

a. What are the implied PPP exchange rates?

b. How would the presence of a high sales tax in Britain, such as the value added tax (VAT), influence your guess of where the actual value of S($/£) would be vis-à-vis the PPP value of S($/£)?

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International Finance

ISBN: 9780415774598

5th Edition

Authors: Maurice D Levi

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Question Posted: Oct 16, 2024 05:02 AM

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2. Assume that the prices of a standard basket of goods and services in different countries are...

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International Finance

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