If Wisconsin cheddar cheese sells for $3.00 per pound in the United States and for 27.90 pesos in Mexico, what is the exchange rate between the dollar and the peso (assuming PPP holds)?
A. $1 = 2.79 pesos
B. $1 = 7.90 pesos
C. $1 = 9.30 pesos
D. $1 = 27.90 pesos
Answer: C
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