In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate? (explain the answer) a. 4/2.7 loaves of British bread per loaf of French bread b. 3.6/3 loaves of British bread per loaf of French bread c. 3/3.6 loaves of British bread per loaf of French bread d. 2.7/4 loaves of British bread per loaf of French bread

In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate? (explain the answer) a. 4/2.7 loaves of British bread per loaf of French bread b. 3.6/3 loaves of British bread per loaf of French bread c. 3/3.6 loaves of British bread per loaf of French bread d. 2.7/4 loaves of British bread per loaf of French bread

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the
exchange rate is .9 pounds per euro, what is the real exchange rate? (explain the answer)
a. 4/2.7 loaves of British bread per loaf of French bread
b. 3.6/3 loaves of British bread per loaf of French bread
c. 3/3.6 loaves of British bread per loaf of French bread
d. 2.7/4 loaves of British bread per loaf of French bread

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