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if ford mustang costs $30,000 in the us and 40,000 pounds in the uk and the current exchange rate between pound and dollar is $1.2 per pound, then according to ppp pound is ______ and should ________.

Sagot :

Based on the information given, it can be deduced that according to ppp, pound is overvalued and should depreciate.

Purchasing power parity (PPP) simply means the idea that goods in a country will be the same cost in another country once their exchange rate is applied.

From the information given, since Ford Mustang costs $30,000 in the us and 40,000 pounds in the uk and the current exchange rate between pound and dollar is $1.2 per pound, then, pound is overvalued and should depreciate.

Learn more about PPP on:

https://brainly.com/question/162747

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