A pound of steak costs $10 in the U.S. and 56.25 riyals (the currency of Saudi Arabia) in Saudi Arabia. If the real exchange rate is 2/3, what is the nominal exchange rate? Show your work
The real exchange rate 2/3 = $10 x the nominal exchange rate/56.25 riyals.
2 x 56.25 riyals/3 x $10 = the nominal exchange rate
the nominal exchange rate = 112.50 riyals /$30 = 3.75 riyals per dollar
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