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Problem
Suppose that under the gold standard the mint par of 1 ounce of gold is $40 in the United States, £20 in the United Kingdom, and 60 pesos in Mexico. Assume that the cost of transporting gold between any pair of countries is $1 (or equivalent in £ or pesos) per ounce.
(a) Calculate (in $/£) the gold export point from the United States to the United Kingdom and the gold import point to the United States from the United Kingdom.
(b) Calculate (in peso/£) the gold export point from Mexico to the United Kingdom and the gold import point to Mexico from the United Kingdom.
(c) Calculate (in peso/$) the gold export point from Mexico to the United States and the gold import point to Mexico from the United States.
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