What is the value of the real exchange rate
Problem
Suppose a Smart phone cost $350 in Canada and Yuan 2,500 in China. If the nominal exchange rate is $1 Canadian dollar is equal to Yuan7.75.
1. What is the value of the real exchange rate?2. In which country is the Smart phone cheaper?
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Suppose a Smart phone cost $350 in Canada and Yuan 2,500 in China. What is the value of the real exchange rate? In which country is the Smart phone cheaper?
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