Prices...?

Question

In the Dominican Republicthe currency exchange is 1 US Dollar = 34 Dominican Pesos. Does this mean material things there are expensive, or I just don't have 2 pay a lot bc of the exchange rate?

Answer 1

This is just a nominal exchange rate - and beside, if you get for one dollar 34 pesos, then the value of the dollar exceed 34 times the pesos. But it is not as easy. All depends on the purchasing power: If you get for 34 pesos a burger, and in US for one dollar a burger too, then purchasing power has the parity. If you get only one burger for 68 pesos, and in US you get it for 1 one dollar, then the dollar is not as high then the peso. And of course vice versa.