If the unit of foreign currency is the peso,in which case is the real exchange rate 1.2?
A)the U.S.price is $2,the foreign price is 5 pesos,and the exchange rate is 3 pesos per dollar.
B)the U.S.price is $3,the foreign price is 18 pesos,and the exchange rate is 5 pesos per dollar.
C)the U.S.price is $5,the foreign price 12 pesos,and the exchange rate is 2 pesos per dollar.
D)the U.S.price is $10,the foreign price is 3 pesos,and the exchange rate is 4 pesos per dollar.

Question

Quizplus · Accepted Answer

The real exchange rate is calculated as (Nominal Exchange Rate * Domestic Price) / Foreign Price. For option A: (3 pesos per dollar * $2) / 5 pesos = 1.2.

If the Unit of Foreign Currency Is the Peso,in Which