Multiple Choice
A pair of jeans cost $25 in the U.S.and 1600 dinar in Algeria.If the nominal exchange rate is 75 dinar per U.S.dollar,then the real exchange rate is
A) more than one,so a profit could be made by buying jeans in Algeria and selling them in the U.S.
B) more than one,so a profit could be made by buying jeans in the U.S.and selling them in Algeria.
C) less than one,so a profit could be made by buying jeans in Algeria and selling them in the U.S.
D) less than one,so a profit could be made by buying jeans in the U.S.and selling them in Algeria.
Correct Answer:
Verified
Correct Answer:
Verified
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