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Purchasing power parity (PPP)

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Hockey skates sell in Canada for $105 Canadian dollars. Currently, 1 Canadian dollar equals 0.74 U.S. dollar. If purchasing power parity (PPP) holds, what is the price of hockey skates in the United States?
$64.79
$71.10
$74.55
$77.70
$87.15

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Solution Summary

Using Purchasing power parity (PPP), the price of hockey skates in the United States is calculated, given the price in Canada and the exchange rate between Canadian dollar and U.S. dollar.

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Hockey skates sell in Canada for $105 Canadian dollars. Currently, 1 Canadian dollar equals 0.74 U.S. ...

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