Once the COVID-19 pandemic is under control, Argentina and Chile would both be fascinating countries to visit. You want to visit both countries and experience their wonders for yourself. But, travel advisors point out that if the two economies return to their pre-pandemic situation, it would be cheaper to go Argentina than to Chile. See, for example, the Budget Your Trip webpage on cost comparisons.(https://www.budgetyourtrip.com/compare/chile-vs-argentina/150). So, visiting Argentina rather than Chile may make economic sense in that situation. A trip to Chile could be postponed till things change in some later years and the cost of travel to Chile goes down relative to the cost of visiting Argentina. You want to know why Argentina has been cheaper than Chile and what sort of changes in the two countries might change the relative costs of visiting them.

(a)When sites such as Budget Your Trip claim that Argentina is cheaper than Chile, are they comparing the nominal or the real exchange rates of the two countries? How do we know which one they are using?

(b)Is the travel advisors' claim that Argentina is less expensive than Chile corroborated by the relative price of Big Mac in Argentina and Chile in July 2019? Please use The Economist's website for the Big Mac Index, (https://www.economist.com/big-mac-index), to find by what percentage the nominal dollar price of Big Mac in Chile, P_C, was higher than the nominal price of Big Mac in Argentina, P_A, in July 2019; that is, calculate (P_C - P_A)/P_A and express it as a percentage with one decimal point. Based on this calculation, is the claim corroborated?