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If purchasing power parity holds, a bushel of rice costs $10 in the US, and the nominal exchange rate is 2 Thai bhat per dollar, what is the price of rice in Thailand

User Amanjiang
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1 Answer

2 votes

Answer:

20 bhat

Step-by-step explanation:

Calculation for the price of rice in Thailand

Using this formula

Price=Costs×Nominal exchange rate

Let plug in the formula

Price =$10×2 Thai bhat per dollar

Price =20 bhat

Therefore the price of rice in Thailand will be

20 bhat

User Ulug Toprak
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7.4k points