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
Economics
You might also like to view...
When the economy reaches a trough in a business cycle, which of the following will occur?
A) Income, production, and employment will begin to rise. B) Income and production will rise, but employment will continue to fall. C) Employment rises, but income and production will continue to fall. D) Income, production, and employment will continue to fall.
Economics
What are the major factors that a TNC should weigh in deciding to invest in a developing country?
What will be an ideal response?
Economics