A good in the U.S. costs $20 . The same good costs 150 pesos in Mexico. If the nominal exchange rate is 10 pesos per dollar, what is the real exchange rate?
a. 4/3 so the good is more expensive in the U.S.
b. 4/3 so the good is more expensive in Mexico
c. 3/4 so the good is more expensive in the U.S.
d. 3/4 so the good is more expensive in Mexico
a
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When disposable income increases,
A) the consumption function shifts downward. B) there is a movement downward along the consumption function, but the consumption function does not shift. C) there is no movement along the consumption function, and the consumption function does not shift. D) the consumption function shifts upward. E) there is a movement upward along the consumption function, but the consumption function does not shift.
Refer to Scenario 14-2. As a result of Kristy's deposit, Bank A's reserves immediately increase by
A) $2,000. B) $8,000. C) $10,000. D) $50,000.