If the Real Exchange Rate Is 5/4 Pounds of Chilean

question 73

Multiple Choice

If the real exchange rate is 5/4 pounds of Chilean beef per pound of U.S.beef,a pound of U.S.beef costs $2 and the nominal exchange rate is 500 Chilean pesos per dollar,then Chilean beef costs

• A)1,250 pesos per pound.
• B)800 pesos per pound
• C)250 pesos per pound.
• D)None of the above is correct.

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