A pair of running shoes costs $70 in the U.S.If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar,than the real exchange rate is
A)more than 1,so a profit could be made by buying these shoes in the U.S.and selling them in India.
B)more than 1,so a profit could be made by buying these shoes in India and selling them in the U.S.
C)less than 1,so a profit could be made by buying these shoes in the U.S.and selling them in India.
D)less than 1,so a profit could be made by buying these shoes in India and selling them in the U.S.

Question

Quizplus · Accepted Answer

The Answer of A pair of running shoes costs $70 in the U.S.If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar,than the real exchange rate is
A)more than 1,so a profit could be made by buying these shoes in the U.S.and selling them in India.
B)more than 1,so a profit could be made by buying these shoes in India and selling them in the U.S.
C)less than 1,so a profit could be made by buying these shoes in the U.S.and selling them in India.
D)less than 1,so a profit could be made by buying these shoes in India and selling them in the U.S.

A Pair of Running Shoes Costs $70 in the U