If a Dollar Buys More Potatoes in the U

question 257

Multiple Choice

If a dollar buys more potatoes in the U.S. than in France, then

• A)the real exchange rate is greater than 1; a profit might be made by buying potatoes in the U.S. and selling them in France.
• B)the real exchange rate is greater than 1; a profit might be made by buying potatoes in France. and selling them in the U.S.
• C)the real exchange rate is less than 1; a profit might be made by buying potatoes in the U.S. and selling them in France.
• D)the real exchange rate is less than 1; a profit might be made by buying potatoes in France and selling them in the U.S.

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