A can of soda costs $0.75 in the United States and 12 pesos in Mexico. What is the peso-dollar exchange rate if purchasing-power parity holds? If a monetary expansion caused all prices in Mexico to double, so that soda rose to 24 pesos, what would happen to the peso-dollar exchange rate?

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A can of soda costs 075 in the 12 pesos in If purcha... View the full answer