Business, 15.04.2020 23:06, mikelback419

Suppose the current exchange rate between the U. S. dollar and the Mexican peso is $0.12 = 1 peso. Furthermore, suppose the price level in Mexico rises 25 percent while the U. S. price level remains constant. According to the purchasing power parity theory, what will be the equilibrium exchange rate? Group of answer choices

$0.15 = 1 peso
$0.09 = 1 peso
$0.16 = 1 peso
$0.096 = 1 peso

Answers: 3

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Suppose the current exchange rate between the U. S. dollar and the Mexican peso is $0.12 = 1 peso. F...