If the Ratio of the Price Level in the U

question 12

Multiple Choice

If the ratio of the price level in the U.S.to the price level in Canada is 1.3 and the nominal exchange rate is 0.75 Canadian dollars per U.S.dollar, then the real exchange rate is

• A)1.30.​
• B)1.75.
• C)0.975.
• D)0.25.

---

Definitions:

Property Rights

The legal rights to possess, use, and dispose of assets including real estate, personal property, and intellectual property.

International Monetary Fund

An international organization created to promote global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Economic Development

The method through which a country enhances the financial, governmental, and societal prosperity of its citizens.

World Bank

A worldwide banking entity that issues loans and grants to assist capital projects in impoverished countries through their governments.