Suppose a carton of hockey pucks sell in Canada for 115 Canadian dollars, and 1 US Dollar equals 1

Business Dec 09, 2020

Suppose a carton of hockey pucks sell in Canada for 115 Canadian dollars, and 1 US Dollar equals 1.2937 Canadian dollars. If purchasing power parity (PPP) holds, what is the price of hockey pucks in the United States? Enter your answer rounded to two decimal places.

Expert Solution

Computation of Price of Hockey pucks in US:

Price of Hockey pucks in US = Price in canadian dollar / Exchange rate of canadian dollar

= 115 / 1.2937

Price of Hockey pucks in US = $88.89

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