Question

If purchasing power parity​ holds, the price level in Turkey is​ 210, and the nominal exchange rate​ (E) = 0.84 Turkish lira ​= 1 Brazilian​ real, then the price level in Brazil​ (considering Brazil to be the​ "domestic" country) must be:_______a. 297.6 b. 275 c. 250 d. 200

Answer 1

c. 250

Step-by-step explanation:

Since; Turkish lira ​= 1 Brazilian​ real

and exchange rate​ (E) = 0.84

Considering that Brazil is the home country

The price level in Turkey = 210

∴ Brazil price level = 210 / 0.84 = 250 real