If a certain automotive part can be purchased in Mexico for 32 pesos or in the United States for $5.25, and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is more expensive in the United States.
B. costs the same in Mexico and the United States.
C. is more expensive in Mexico.
D. is less expensive in the United States.
Answer: A
You might also like to view...
When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand
a. True b. False Indicate whether the statement is true or false
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Discuss the relationship between world trade and world Gross Domestic Product (GDP) since the early 1950s
What will be an ideal response?
What are the effects of an increase in the minimum wage? Who would be most affected?
What will be an ideal response?