Goods that cost one dollar in the U.S.cost one euro in France,the real exchange rate would be computed as how many French goods per U.S.goods?
A)one
B)the price of the U.S.goods
C)the number of euros that can be bought with one U.S.dollar
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The real exchange rate is the rate at which one country's currency can be exchanged for another country's currency to buy the same amount of goods. In this case, since goods cost one dollar in the U.S. and one euro in France, the exchange rate would be how many euros can be bought with one U.S. dollar, which is choice C.

Goods That Cost One Dollar in the U