Suppose an Item Sells for $125 in the United States

question 83

Multiple Choice

Suppose an item sells for $125 in the United States and for 62,500 pesos in Chile.According to the law of one price,the nominal exchange rate (pesos/dollar) should be ________.

• A)31,313
• B)either $125,or 62,500 pesos,but not both
• C)0.002
• D)500

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