If a car costs $44,000 in the U.S. and 40,000 euros in Germany, what does the exchange rate need to be for purchasing power parity to exist?
a) 1 euro = $0.91
b) 1 euro = $1
c) 1 euro = $1.10
d) 1 euro = $1.76
Ans: c) 1 euro = $1.10
Economics
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