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A world with only two countries and two goods: Computers Ice Cream Price of Price of Country Produced Produced Computers Ice Cream per Capita per
A world with only two countries and two goods: Computers Ice Cream Price of Price of Country Produced Produced Computers Ice Cream per Capita per Capita Local Units Local Units USA 12 4 2 4 Mexico 3 1 1 1 (a) Calculate the GNP per capita of each country in their own currency. (b) Convert Mexicos GNP per capita into $US at the market exchange rate. What is the ratio? (c) Calculate the PPP exchange rate between the two countries, using the US basket. (d) Convert Mexicos GNP per capita into $US using the PPP exchange rate. What is the ratio? 1
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