The local currency in Peru is the Peruvian Nuevo Sol (PNS). In 2020, the official exchange rate between the PNS and the USD was 3 (i.e., 3 PNS = 1USD). Table 1 gives local currency prices of three goods in Peru and the United States. Table 1 also gives the expenditure shares of each good (i.e., what fraction of total expenditures do people spend on each good).
The local currency in Peru is the Peruvian Nuevo Sol (PNS). In 2020, the official exchange rate between the PNS and the USD was 3 (i.e., 3 PNS = 1USD). Table 1 gives local currency prices of three goods in Peru and the United States. Table 1 also gives the expenditure shares of each good (i.e., what fraction of total expenditures do people spend on each good).
Chapter1: Making Economics Decisions
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Transcribed Image Text:The local currency in Peru is the Peruvian Nuevo Sol (PNS). In 2020, the official exchange rate between
the PNS and the USD was 3 (i.e., 3 PNS = 1USD). Table 1 gives local currency prices of three goods in
Peru and the United States. Table 1 also gives the expenditure shares of each good (i.e., what fraction of
total expenditures do people spend on each good).
Table 1. Local Prices & Expenditure Shares in Peru and the U.S.
Prices in Local Currencies
Item
Expenditure Share
Peru
U.S.
Corn (1 kg)
T-Shirts (1 shirt)
Rent (2 bedroom apartment)
0.3
6 PNS
2 USD
0.2
45 PNS
15 USD
0.5
1,000 PNS
1,000 USD
Transcribed Image Text:7. Peru's GDP per capita in 2020 was 18,000 PNS. Calculate and report Peru's GDP per capita in USD
using the Official Versus PPP exchange rates.
Peru's GDP per capita in USD using Official Exchange Rate:
Peru's GDP per capita in USD using PPP Exchange Rate:
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