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Question l Consider a world with two commodities: smartphones, which are traded internationally, and ice cream, which is not Country Smartphones Ice Cream Price of Price of Produced per Capita Produced Smartphones in Ice Cream in per Capita Local Currency Local Currency 25 15 10 Using the information given in the table, answer the following: a) Calculate the GDP per capita in each country in the local currency. b) Calculate the market exchange rate between the currencies of the two countries c) What is the ratio of GDP per capita in Country 1 to GDP per capita in Country 2, using the market exchange rate? d) Calculate the purchasing power parity (PPP) exchange rate between the two currencies e) What is the ratio of GDP per capita in Country 1 to GDP per capita in Country 2, using the PPP exchange rate?

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