The price of a Big Mac in the U.S. is $4.93; the price in France is 3.72 euros. The current exchange rate is 1.07€/$. What is the real exchange rate?
What will be an ideal response?
The real Big Mac exchange rate is the U.S. price of a Big Mac divided by the foreign price (converted into U.S. dollars at the nominal exchange rate) of a Big MaC) When the calculations are done we find the real Big Mac exchange rate is 1.42. This means that one U.S. Big Mac will purchase 1.42 French Big Macs.
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Commodity money is a good
A) that is designated as money by law. B) used as money that has no intrinsic value. C) used as money that has no secondary use. D) used as money that also has value independent of its use as money.
What is the more efficient choice: sending one's child to John Q. Public High School at zero dollar tuition or to Purebred Prep School at several thousand dollars a year?
A) High school, because it's much cheaper. B) Prep school, because it's much higher in quality of instruction. C) Prep school, because what matters most is not what you know, but who you know. D) It depends on the decision makers' own evaluations of cost and benefit.
In monopolistic competition, product differentiation gives the firms the power to set their prices
Indicate whether the statement is true or false
According to the above figure, the profit-maximizing output for this monopolist is found directly below the letter
A) R. B) M. C) P. D) N.