Use the Following to Answer Questions

Use the following to answer questions :
Scenario: Exchange Rate between the United States and India
Suppose that initially the nominal exchange rate was 40 rupees per dollar but it is now 50 rupees per dollar.
-(Scenario: Exchange Rate between the United States and India) Look at the scenario Exchange Rate between the United States and India. If the nominal exchange rate is 50 rupees per dollar and the inflation rate in India is 25%, while the aggregate price level has remained unchanged in the United States, the real exchange rate between the U.S. dollar and the Indian rupee:

A) remains unchanged at 40.
B) remains unchanged at 50.
C) increases from 40 to 50.
D) increases by more than 25%.