In the spot market, 11.1 pesos can be exchanged for 1 U.S. dollar. A pair of...
In the spot market, 11.1 pesos can be exchanged for 1 U.S. dollar. A pair of headphones costs $18 in the United States. If purchasing power parity holds, what should be the price of the same headphones in Mexico? Do not round intermediate calculations. Round your answer to two decimal places.
Homework Answers
Ans 199.80 pesos
1 USD = 11.1 pesos
A pair of headphones costs $18 in the United States. If purchasing power parity holds, the price of the same headphones in Mexico = 11.1 * 18
= 199.80 pesos
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