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What impact the increase in the cost of foreign cell phones

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Question - Currently there are no Cell Phone Manufacturers that manufacture cell phones in Canada. All Cell Phones sold in Canada are imported. As such, if the cost of Cell Phones rises, Canadians do not have an alternative to pay more. Explain this situation using the concept of Purchasing Power Parity. On Average 10% of all households spend their disposable income on Cell Phones. Explain what impact the increase in the cost of foreign cell phones would have on the Canadian Economy.

Reference no: EM133158348

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