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

question 149

Multiple Choice

If the cost of a typical basket of goods in the U.S. is $100 and in China it is 500 yuan, and the nominal exchange rate is 10 yuan per dollar, what is the real exchange rate?

• A) 1.
• B) 2.
• C) 3.
• D) 4.

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Definitions:

Crackerjack

A brand of caramel-coated popcorn and peanuts, often associated with being a classic American snack.

Discouraged

Refers to individuals who are not actively seeking employment due to believing that there are no job opportunities available for them.

Unemployed

The condition of a person who is capable of working, actively seeking work, but unable to find any employment.

Degree of Inflation

The rate at which the general level of prices for goods and services is rising, thereby eroding purchasing power.