The currencies in countries M and N are denoted by m and n respectively. The exchange rate in 1990 was lm. 0.6n the price level in 2006 in M and N are 150 and 400 respectively with 1990 as a base of 100. The exchange rate in 2006 based solely on the purchasing power parity consideration is 1 m :

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INSURANCE EXAMS (GIC) 2011 click here to view all questions

The currencies in countries M and N are denoted by m and n respectively. The exchange rate in 1990 was lm. 0.6n the price level in 2006 in M and N are 150 and 400 respectively with 1990 as a base of 100. The exchange rate in 2006 based solely on the purchasing power parity consideration is 1 m :

A0.225 n

B0.625 n

C1.6 n

D3.6 n

Nithin ? Aug 10 '2022 at 21:18

Correct anser is: 0.225 n

Explanation:

\(\Large \frac{1m}{150}=\frac{0.6n}{400}\)

\(\implies 1m = \Large \frac{0.6}{400} \times 150n = \text{2%}\)

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Correct anser is: 0.225 n Explanation: \(\Large \frac{1m}{150}=\frac{0.6n}{400}\) \(\implies 1m = \Large \frac{0.6}{400} \times 150n = \text{2%}\) Nithin ? answered Aug 10 '2022 at 21:18 All Comments

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