Answer:
The price of rice in the Thailand is likely to be 250 Thai baht per bushel.
Explanation:
According to the purchasing power parity theory, the exchange rate between two countries is based on a basket of goods. The nominal exchange rate is the ratio of prices of goods in two different countries.
The price of rice in the US is $10 per bushel.
The nominal exchange rate between US dollars and Thai baht is 25 Thai baht/$.
The nominal exchange rate = [tex]\frac{price\ of\ rice\ in\ Thailand}{price\ of\ rice\ in\ US}[/tex]
25 Thai baht/$= [tex]\frac{price\ of\ rice\ in\ Thailand}{\$10}[/tex]
Price of rice in Thailand = [tex]\$10\ \times\ 25[/tex]
Price of rice in Thailand = $250
