Question

A box of candy costs 28.80 Swiss francs in Switzerland and $21.80 in the United States. Assuming that purchasing power parity (PPP) holds, how many Swiss francs are required to purchase one U.S. dollar? Do not round the intermediate calculations and round the final answer to four decimal places

Answer 1

Answer:

1.3211 Swiss francs are required to purchase one U.S. dollar

Explanation:

The purchasing power parity theory states that the same quantity of goods and services can be bought with different currencies of the same worth

28.80 Swiss francs has the same worth as 21.80 U.S. dollars

Therefore, 28.80/21.80 Swiss francs = 1.3211 Swiss francs are required to purchase one U.S. dollar