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Over the past year, prices in Patagonia have risen by 45 percent, and U.S. prices have risen by 2 percent. During this time period, the
Over the past year, prices in Patagonia have risen by 45 percent, and U.S. prices have risen by 2 percent. During this time period, the value of the Patagonian peso has dropped from P1 = $1.00 to P1 = $0.85.
(a)What has happened to the real value of the peso over the past year? Has it gone up or down? By how much?
(b)And what has happened to the competitiveness of Patagonian manufacturing companies over this time period?
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