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Question
A bottle of German wine costs €21 (euros) in Berlin. According to the purchasing power parity theory, what would the bottle sell for in New York if it costs the New York company $1.25 per bottle to transport the wine to the United States? Assume the exchange rate is $1.32 per euro.A) $40.54
B) $28.97
C) $27.22
D) $39.50
Answer
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