PURCHASING-POWER PARITY                                                                    

A pair of Men’s Burton lace-up dress shoes cost SAR 475 in Saudi Arabia but costs GBP 79 in England. Assuming that purchasing-power parity (PPP) holds, how many SAR are required to purchase 1 GBP.                                                                    

Cost in Saudi Arabia =475 SAR

Cost in England = 79       GBP                                      

pair of Burton shoes      SAR       GBP      SAR/shoes         shoes/GBP        GBP/SAR

           1                              475       –             475   

           1                                           79                                  

     SAR/GBP =         (SAR/shoes)*(shoes/GBP) =                        

Note make it as excel financial calculations