Multiple Choice
If a dollar buys more potatoes in the U.S. than in France, then
A) the real exchange rate is greater than 1; a profit might be made by buying potatoes in the U.S. and selling them in France.
B) the real exchange rate is greater than 1; a profit might be made by buying potatoes in France. and selling them in the U.S.
C) the real exchange rate is less than 1; a profit might be made by buying potatoes in the U.S. and selling them in France.
D) the real exchange rate is less than 1; a profit might be made by buying potatoes in France and selling them in the U.S.
Correct Answer:
Verified
Correct Answer:
Verified
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