If the Current Exchange Rate Is 1€/1$U

question 54

Multiple Choice

If the current exchange rate is 1€/1$U.S.and bagels cost 1€ in France and 1$ in the U.S.and the current exchange rate for bagels is 0.74 European bagel/1U.S.bagel and if the bagels are identical:

• A)U.S.bagels are less expensive than French bagels
• B)U.S.and French bagels are the same price
• C)French bagels are less expensive than U.S.bagels
• D)Americans should import French bagels