Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 2

Suppose the current U.S.-UK exchange rate is 0.63 pounds (the pound is the UK currency) per dollar, and the aggregate price level is 170 for the U.S. and 140 for the UK. What is the real exchange rate? What does this real exchange rate mean in terms of the relative purchasing power of the dollar and the pound?