A can of soda costs $1.25 in the United States and 25 pesos in Mexico. What is the pesos-dollar exchange rate(meaured in pesos per dollar) if purchasing-power parity holds? If a monetary expansion caused all prices in mexico to double, so that soda rose to 50 pesos, what would happen to the peso-dollar exchnage rate?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A can of soda costs $1.25 in the United States and 25 pesos in Mexico.

What is the pesos-dollar exchange rate(meaured in pesos per dollar) if

purchasing-power parity holds? If a monetary expansion caused all prices

in mexico to double, so that soda rose to 50 pesos, what would happen

to the peso-dollar exchnage rate?

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