The following table provides nominal exchange rates for the U.S. dollar. $$\begin{array} { l c c }
{ \text { Country } } & \text { Foreign currency/dollar } & \text { Dollar/foreign currency } \
\text { Canada (Canadian dollar) } & 1.488 & .672 \
\text { Mexico (peso) } & 9.259 & .108
\end{array}$$ Based on these data, the nominal exchange rate equals approximately ______ pesos per Canadian dollar or, equivalently, ______ Canadian dollars per peso.
A) 0.672; 1.488
B) 9.259; 0.108
C) 6.222; 0.161
D) 7.771; 0.129

Question

The following table provides nominal exchange rates for the U.S. dollar. $$\begin{array} { l c c } 
{ \text { Country } } & \text { Foreign currency/dollar } & \text { Dollar/foreign currency } \
\text { Canada (Canadian dollar) } & 1.488 & .672 \
\text { Mexico (peso) } & 9.259 & .108
\end{array}$$ Based on these data, the nominal exchange rate equals approximately ______ pesos per Canadian dollar or, equivalently, ______ Canadian dollars per peso.
A) 0.672; 1.488
B) 9.259; 0.108
C) 6.222; 0.161
D) 7.771; 0.129

Quizplus · Accepted Answer

To find the nominal exchange rate, we need to divide the foreign currency by the dollar. 
For Canada: 1.488 Canadian dollar / 1 U.S. dollar = 0.672 U.S. dollar / 1 Canadian dollar 
For Mexico: 9.259 Mexican pesos / 1 U.S. dollar = 0.108 U.S. dollar / 1 Mexican peso 
Therefore, the nominal exchange rate is approximately 6.222 pesos per Canadian dollar, or equivalently, 0.161 Canadian dollars per peso. This matches with option C.

The Following Table Provides Nominal Exchange Rates for the U