contestada

If the real exchange rate for coal is 1.5, the price of coal in the United States is $50 per ton, and the price of coal in Britain is 20 British pounds per ton, what is the nominal exchange rate

Respuesta :

abiolataiwo2015

Based on the information given the nominal exchange rate is 3/5.

Given:

Real exchange rate=1.5

Price(United state)=$50 per ton

Price(Britain)=20 pounds per ton

Hence:

1.5 = Nominal Exchange rate ×50/20

Nominal Exchange rate = 1.5 × 20/50

Nominal Exchange rate = 30/50

Nominal Exchange rate = 3/5

Inconclusion  the nominal exchange rate is 3/5.

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