Suppose the only good traded between Mexico, the U.S., and Brazil is beef, which is produced by all three countries. If the cost of producing a pound of beef is 5 pesos in Mexico, 2 dollars in the U.S., and 1 real in Brazil, the exchange rates based on the law of one price would be ____ pesos per dollar and ____ dollars per real.
A. 2.5; 2
B. 2.5; 0.5
C. 0.4; 0.5
D. 0.4; 2
Answer: A
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