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Considering the wage differences and Big Mac prices between the United States and Canada, which statement is true?

A) Mark's purchasing power is higher than Jean's.
B) Jean's purchasing power is higher than Mark's.
C) Both have equal purchasing power.
D) It's impossible to determine purchasing power from this information.

User Kglr
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1 Answer

4 votes

Final answer:

Without specifics on wages and Big Mac prices, it's not possible to determine whether Mark or Jean has higher purchasing power. Purchasing Power Parity (PPP) and international dollars would be needed to make an accurate comparison.

Step-by-step explanation:

To compare purchasing power between the United States and Canada, we need to consider the concept of Purchasing Power Parity (PPP). PPP implies that in the long term, exchange rates should adjust so that the same goods have similar prices across different countries.

Given this, and considering the price of a Big Mac as an example of a common good, the statement about Mark's and Jean's purchasing power cannot be accurately determined without additional information related to their respective wages and the price of Big Macs in their countries. However, if we have specific figures for wages and Big Mac prices, as well as the knowledge that at one point the Canadian dollar was equal to the US dollar, we could calculate their purchasing power in international dollars, which provides a common basis for comparison.

User KennyH
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