Calculate the Relative Price of a Basket of Goods Sold

Multiple Choice

Calculate the relative price of a basket of goods sold in the United States and Japan in terms of dollars if the yen/$ exchange rate = 90. The basket costs $100 in the United States and ¥9,000 in Japan. The relative price is:

A) 0.9, which means the U.S. basket costs more.
B) 1.1010, which means the Japanese basket costs more.
C) 0.9, which means the Japanese basket costs more.
D) 1.0, which means they both cost the same.