Are data consistent with theory of purchasing power parity

Reference no: EM131022809

In December 2012, you needed 25 percent more pesos to buy one U.S. dollar than you had needed in December 2002. Over the same time period, the consumer price index in Mexico increased 51.1 percent and the consumer price index in the United States increased 27.1 percent. Are these data consistent with the theory of purchasing power parity? Briefly explain.

Reference no: EM131022809

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