If a Certain Automotive Part Can Be Purchased in Mexico

question 137

Multiple Choice

If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for $6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:

• A)is less expensive in Mexico.
• B)is more expensive in the United States.
• C)is less expensive in the United States.
• D)costs the same in Mexico and the United States.