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If a Dollar Buys Less Coffee in the U

Question 224

Multiple Choice

If a dollar buys less coffee in the U.S. than in Kenya, then


A) the real exchange rate is greater than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S.
B) the real exchange rate is greater than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya.
C) the real exchange rate is less than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S.
D) the real exchange rate is less than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya.

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