If the Cost of a Typical Basket of Goods in the U.S

question 99

Multiple Choice

If the cost of a typical basket of goods in the U.S. is $100 and in Germany it is 200 euros, and the nominal exchange rate is 0.7 euro per dollar, what is the real exchange rate?

• A) 0.35.
• B) 0.50.
• C) 3.50.
• D) 1.50.

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