PurchasingpowerParity=CostofgoodXincountry2CostofgoodXincountry1
PurchasingpowerParity=CostofgoldinPeruCostofgoldinUS=2,400300=0.125
When purchasing power parity is held, then the price of oil in terms of Peruvian sols will be;
=CostofoilinPeru25=0.125
CostofoilinPeru=0.12525=200Peruviansols
=200Peruviansols
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