If the price of a good in the U.S. is $10 and the unit of foreign currency is the stone, in which case is the real exchange rate 4/5?
A) the foreign price is 4 stones and the exchange rate is 2 stones per dollar
B) the foreign price is 5 stones and the exchange rate is 2.5 stones per dollar
C) the foreign price is 4 stones and the exchange rate is 1/2 stones per dollar
D) the foreign price is 5 stones and the exchange rate is 2/5 stones per dollar
Correct Answer:
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