If it took as many dollars to buy goods in the United States as it did to buy enough currency to buy the same goods in India,the real exchange rate would be computed as how many Indian goods per U.S.goods?
A)one
B)the number of dollars needed to buy U.S.goods divided by the number of rupees needed to buy Indian goods
C)the number of rupees needed to buy Indian goods divided by the number of dollars needed to buy U.S.goods
D)None of the above is correct.

Question

Quizplus · Accepted Answer

If it takes the same amount of dollars to buy goods in the U.S. as it does to buy enough currency to buy the same goods in India, the real exchange rate would be one Indian good per U.S. good, indicating purchasing power parity.

If It Took as Many Dollars to Buy Goods in the United