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.
a
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