Multiple Choice
If a dollar buys less coffee in the U.S. than in Kenya, then
A) the real exchange rate is greater than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S.
B) the real exchange rate is greater than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya.
C) the real exchange rate is less than 1; a profit might be made by buying coffee in Kenya and selling it in the U.S.
D) the real exchange rate is less than 1; a profit might be made by buying coffee in the U.S. and selling it in Kenya.
Correct Answer:
Verified
Correct Answer:
Verified
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