If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is less expensive in Mexico.
B. costs the same in Mexico and the United States.
C. is more expensive in the United States.
D. is less expensive in the United States.
Answer: D
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