Task: Consider the economy of Tunisia in which there are two goods (Y which costs 20 Dinars, and Y which costs 30 dinars. There are two units of each good. In the US, prices are $1 for X and $3 for Y. The exchange rate is 1 Dollar for 60 Dinars.
Problem 1. What is the dollar value of gross national income in Tunisia evaluated at exchange rate?
Problem 2. What is the dollar value of gross national income in Tunisia evaluated at PPP? Comparing these two values, what do we learn?