Assume that the dollar price of a basket of good in the United States is $2 and the Mexican price of the same basket in the United States is 40 pesos.In addition,the Mexican price of the same basket in Mexico is 100 pesos.Given this information,the dollar price of the same basket in Mexico will be ________.

Question

Quizplus · Accepted Answer

The dollar price of the basket in Mexico can be calculated using the exchange rate derived from the given prices. The exchange rate is 40 pesos / $2 = 20 pesos per dollar. Therefore, the dollar price of the basket in Mexico, priced at 100 pesos, is 100 pesos / 20 pesos per dollar = $5.

Assume That the Dollar Price of a Basket of Good