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Business, 23.03.2021 17:30 1846252

Suppose the current exchange rate between the U. S. dollar and the Mexican peso is $0.10 = 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?

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Suppose the current exchange rate between the U. S. dollar and the Mexican peso is $0.10 = 1 peso. F...
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