Question

Purchasing-power parity holds between the nations of Ectenia and Wiknam, where the only commodity is Spam. a. In 2015, a can of Spam costs 4 dollars in Ectenia and 24 pesos in Wiknam. What is the exchange rate between Ectenian dollars and Wiknamian pesos

Answer 1

Answer:

the exchange rate between two different currency is  6 pesos per dollar

Explanation:

The computation of the exchange rate between two different currency is

= Unit cost of spam in Wiknam ÷ unit cost of  spam in Ectenia

= 24 pesos ÷ 4 dollars

= 6 pesos per dollar

hence, the exchange rate between two different currency is  6 pesos per dollar

We simply applied the above formula so that the currency rate could come

And, the same is to be applied