The nominal exchange rate in Kenya is 94 Kenyan shillings per U.S.dollar.A burger in the United States costs $2.A similar burger at Steers Restaurant in Kenya costs 94 shillings.The real exchange rate in terms of U.S.burgers for Kenyan burgers is:

Question

Quizplus · Accepted Answer

To calculate the real exchange rate in terms of U.S. burgers for Kenyan burgers, we need to compare the price of a burger in Kenya with the price of a burger in the United States. Since a burger in the United States costs $2 and a burger in Kenya costs 94 shillings, we need to convert the price of a burger in Kenya to dollars using the nominal exchange rate:

94 shillings / 94 shillings per dollar = 1 dollar

Therefore, a burger in Kenya costs $1. To calculate the real exchange rate, we divide the price of a burger in Kenya ($1) by the price of a burger in the United States ($2):

$1 / $2 = 0.5

So the real exchange rate in terms of U.S. burgers for Kenyan burgers is 1:2, meaning that you can buy two burgers in Kenya for the price of one burger in the United States.

The Nominal Exchange Rate in Kenya Is 94 Kenyan Shillings