In the United States,a three-pound can of coffee costs about $5.Suppose the exchange rate is about 0.8 euros per dollar and that a three-pound can of coffee in Belgium costs about 3 euros.What is the real exchange rate?

Question

Quizplus · Accepted Answer

To find the real exchange rate, we need to compare the cost of a can of coffee in the US in euros with the cost of a can of coffee in Belgium in euros.

The cost of a can of coffee in the US is $5, which is equivalent to 5 x 0.8 = 4 euros.

The cost of a can of coffee in Belgium is 3 euros.

Therefore, the real exchange rate is 3/4 cans of Belgian coffee per can of US coffee.

So the answer is B, which represents 4/3 cans of Belgian coffee per can of US coffee.

In the United States,a Three-Pound Can of Coffee Costs About