Suppose the Real Exchange Rate Is 1

Multiple Choice

Suppose the real exchange rate is 1.25 pounds of bananas in Guatemala per pound of bananas in the U.S.If a pound of bananas in the U.S.costs $.50,and the exchange rate is 10 Guatemalan Quetzals per dollar,what is the price of bananas in Guatemala?

A) 2.50 Quetzals per pound
B) 4.00 Quetzals per pound
C) 5.75 Quetzals per pound
D) 6.25 Quetzals per pound