Mock (AM) Q 20 interpret, currency, question, foreign, morning

HuskyGrad2010

Mock exam morning session
Mary Marconi Scenario
Exhibit 1

Normally in foreign currency context x:y = y/x
So ratio of US price level/ UK price level is 1.5:1 means 1/1.5.

However, answer key for question 20 interpret this in other way around?

wilslm

US price level/ UK price level is 1.5:1 means US Price level is 1.5 compared to UK's price level of 1.

If it costs to $1.5 to purchase a burger, the same burger would cost 1 pound in UK.

Best of luck to you all in your forthcoming exams.