Your friend who works as a trading analyst in Sydney, Australia is offered a job position...

Your friend who works as a trading analyst in Sydney, Australia is offered a job position in Barcelona, Spain. The wage for the Spanish job is EUR187705 per year. The price level in Spain is EUR12199. The price level for an equivalent basket of goods in Australia is AUD10909.

The current spot rate is EUR1.0863/AUD.

All else equal, how much does your friend need to earn in Sydney to make her as well off as when she would take the job in Spain?

Select one:

a. AUD 167856

b. AUD 209901

c. AUD 182342

d. AUD 154521

e. AUD 228016

Solutions

Expert Solution

Earnings required in Sydney for being equally well off = Earnings in Spain*Cost of basket in Sydney/Cost of Basket in Spain

= 187705*10909/12199

= AUD 167,855.88

i.e.

a. AUD 167856

jeff jeffy answered 2 years ago

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