Question

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​ ________.

Answer 1

$1 = 500 Pesos

1 Pesos = $0.002

Step-by-step explanation:

$125 = 62,500 Pesos

$1 = 62,500 / 125

$1 = 500 Pesos

$1 = 500 Pesos

1 Pesos = $1 / 500

1 Pesos = $0.002