If three bushels of rice produced in Japan trade for 2 bushels of rice produced in Guatemala, the _____is equal to 1.5.

Question

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The real exchange rate compares the relative price of goods between countries, in this case, rice between Japan and Guatemala. If 3 bushels of rice from Japan trade for 2 bushels from Guatemala, the real exchange rate is 1.5 bushels of Guatemalan rice for every bushel of Japanese rice.

If Three Bushels of Rice Produced in Japan Trade for 2