In the United States, a three-pound can of coffee costs about $5 . If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?
a. 7/4 cans of Belgian coffee per can of U.S. coffee
b. 5.6/5 cans of Belgian coffee per can of U.S. coffee
c. 5/5.6 cans of Belgian coffee per can of U.S. coffee
d. 4/7 cans of Belgian coffee per can of U.S. coffee
d
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The inflation associated with the oil embargoes of the 1970s illustrated the _____ of the downward-sloping Phillips curve in the long run, as unemployment _____ during this period
a. validity; fell b. validity; rose c. fallacy; rose d. fallacy; fell e. fallacy; did not change
When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,
a. the dealership will lose revenue b. marginal revenue and marginal cost are being used to set prices and output c. few dealerships will be able to survive d. rent-seeking behavior will lead new dealerships to enter the market e. this is a form of price discrimination