Answer: US$ 2.58
Explanation:
Absolute PPP holding means that the cost of the Elkhead beer is the same in the United States and Canada with the only variation in price being down to the exchange rate.
The spot rate is $1 is to CAN$1.06 which is the current rate.
Beer is CAN $2.74 so in US$ it will be;
= [tex]\frac{2.74}{1.06}[/tex]
= US$ 2.58
