Question

If an ounce of gold is priced at $1,000 in the U.S. but can be purchased in Mexico for MX $25,000 with an exchange rate of $1 = 20 MX$, then according to the principle of arbitrage, ? Mexicans would buy gold in the US, which would raise the price of gold in Mexico and increase the price difference between the two countries. ? Americans would buy gold in Mexico, which would raise the price of gold in Mexico and reduce the price difference between the two countries. ? Mexicans would buy gold in the U.S., which would raise the price of gold in the US and reduce the price difference between the two countries.

          If an ounce of gold is priced at $1,000 in the U.S. but can be purchased in
Mexico for MX $25,000 with an exchange rate of $1 = 20 MX$, then according
to the principle of arbitrage,
? Mexicans would buy gold in the US, which would raise the price of gold in Mexico
and increase the price difference between the two countries.
? Americans would buy gold in Mexico, which would raise the price of gold in Mexico
and reduce the price difference between the two countries.
? Mexicans would buy gold in the U.S., which would raise the price of gold in the US
and reduce the price difference between the two countries.

If an ounce of gold is priced at 1,000 in the U.S. but can be purchased in
Mexico for MX25,000 with an exchange rate of 1 = 20 MX, then according
to the principle of arbitrage,
? Mexicans would buy gold in the US, which would raise the price of gold in Mexico
and increase the price difference between the two countries.
? Americans would buy gold in Mexico, which would raise the price of gold in Mexico
and reduce the price difference between the two countries.
? Mexicans would buy gold in the U.S., which would raise the price of gold in the US
and reduce the price difference between the two countries.

Added by Mercedes G.

Question

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