contestada

Travelling in Mexico is much cheaper now than it was ten years ago," says a friend. "ten years ago, a dollar bought 10 pesos; this year, a dollar buys 15 pesos." Is your friend right or wrong? Given that total inflation over this period was 25 percent in the United States and 100 percent in Mexico, has it become more or less expensive to travel in Mexico? Write your answer using a concrete example – such as an American hot dog versus a Mexican taco-that will convince your friend.

Respuesta :

Answer:

The friend is wrong as the actual prices have increases over the past ten years

Step-by-step explanation:

Here we have

The cost of travelling in Mexico 10 years ago = X pesos

The cost of 10 pesos 10 years ago = $1.00

The cost of 15 pesos now = $1.00

Inflation in Mexico in 10 years = 100% in US = 25%

Therefore, before the inflation if

Price of one variety of American hot dog = $1.00 and

Price of one taco brand = 10 Pesos

After the inflation we have

25% Increase, price of the same hot dog = $1.25 while

100% increase, price for the taco = 20 pesos

However, 15 pesos is now $1.00, therefore;

20 pesos = $1.00 × 20/15 = $1.33

That is current selling price for taco is $1.33 which is more higher than previous $1.00

Where the cost of travelling in Mexico is directly related to the above example, then, travelling in Mexico is much expensive than it was ten years ago.

Otras preguntas