The currencies in countries X and Y are denoted by Xs. and Ys. respectively. The exchange rate in 1990 was 1 Xs. = 0.6 Ys. The price level in 2006 in X and Y are 150 and 400 respectively with 1990 as a base of 100. The exchange rate in 2006, based solely on this purchasing power parity consideration, is 1 Xs.=
A.
0.225 Ys.
B.
0.625 Ys.
C.
1.6 Ys.
D.
3.6 Ys.
Correct Answer : C

Question

The currencies in countries X and Y are denoted by Xs. and Ys. respectively. The exchange rate in 1990 was 1 Xs. = 0.6 Ys. The price level in 2006 in X and Y are 150 and 400 respectively with 1990 as a base of 100. The exchange rate in 2006, based solely on this purchasing power parity consideration, is 1 Xs.=

A.
0.225 Ys.
B.
0.625 Ys.
C.
1.6 Ys.
D.
3.6 Ys.

Correct Answer : C

A to Z Exams · Accepted Answer

1.6 Ys.

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