If it took as many dollars to buy goods in Canada as it did to buy enough currency to buy the same goods in India, the real exchange rate would be computed as how many Indian goods per Canadian goods?
A)one
B)the number of dollars needed to buy Canadian goods divided by the number of rupees needed to buy Indian goods
C)the number of rupees needed to buy Indian goods divided by the number of dollars needed to buy Canadian goods
D)a number equal to the nominal exchange rate

Question

Quizplus · Accepted Answer

If it takes the same amount of dollars to buy goods in both countries, the real exchange rate is one, meaning one Indian good per Canadian good.

If It Took as Many Dollars to Buy Goods in Canada