In your own words, answer the following questions:
1- In 250 words, discuss the Flow of Capital. (5 marks)
2- Solve the following question. (5 marks)
The price of a tall Starbucks Latte in the US and Mexico is as follows
P = $2 in U.S P* = 16 pesos in Mexico e = 12 pesos per $
A- What is the price of a U.S. latte in pesos?
B- Calculate the real exchange rate.
C- interpret your answer?
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