If the Price Level in the U

question 205

Multiple Choice

If the price level in the U.S. is 120, the price level in South Africa is 140, and the nominal exchange rate is 7 South African rands per dollar, then the real exchange rate is

• A) 6 South African goods per U.S. good.
• B) 8.4 South African goods per U.S. good.
• C) 9.8 South African goods per U.S. good.
• D) 1.4 South African goods per U.S. good.