Solved

If the Law of One Price Holds, and a Tonne

Question 4

Multiple Choice

If the law of one price holds, and a tonne of rice costs $25 in Australia and 4000 yen in Japan, then the nominal exchange rate is:

A) 160 yen/$ and $.10/ yen
B) 1000 yen/$ and $1.00/ yen
C) 400 yen/$ and $.25/ yen
D) 160 yen/$ and $.01/ yen

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