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If the Real Exchange Rate for Coal Is 1

Question 120

Multiple Choice

If the real exchange rate for coal is 1.5, the price of coal in the United States is $50 per ton, and the price of coal in Britain is 20 British pounds per ton, what is the nominal exchange rate?


A) 15/4 or 3.75 pounds per dollar
B) 5/3 or 1.67 pounds per dollar
C) 3/5 or 0.6 pounds per dollar
D) 4/15 or 2.67 pounds per dollar

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