It costs $80 for a dental appointment in the U.S. It costs 600 Egyptian pounds for the same appointment in Egypt. The nominal exchange rate is 7 pounds per dollar. The real exchange rate is

Question

Quizplus · Accepted Answer

To calculate the real exchange rate, we need to divide the cost of a dental appointment in the U.S. by the cost of the same appointment in Egypt, and then multiply by the nominal exchange rate:

Real exchange rate = ($80 / 600 EGP) x 7 EGP per dollar = 0.93

Since the real exchange rate is less than one, it means that dental appointments in Egypt are more expensive than in the U.S.

It Costs $80 for a Dental Appointment in the U