If the cost of the CPI market basket at current period prices is $1000 and the cost of the CPI market basket at base period prices is $250, the CPI is

A basket of goods costs $800 in the U.S. In Canada the same basket of goods costs 800 Canadian dollars and the exchange rate is 1.25 Canadian dollars per U.S. dollars. In Turkey the same basket of goods costs 2400 lira and the exchange rate is 3 lira per dollar. Which country has purchasing-power parity with the U.S.?

a. Both Canada and Turkey b. Canada but not Turkey c. Turkey but not Canada d. neither Canada or Turkey

Based on this figure, if the krone exchange rate is fixed at $0.09 dollars per krone, the krone is:

A. devalued. B. undervalued. C. revalued. D. overvalued.