A pair of running shoes costs $70 in the U. S. If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar, than the real exchange rate is:A. more than 1, so a profit could be made by buying these shoes in the U. S. and selling them in India. B. more than 1, so a profit could be made by buying these shoes in India and selling them in the U. S. C. less than 1, so a profit could be made by buying these shoes in the U. S. and selling them in India. D. less than 1, so a profit could be made by buying these shoes in India and selling them in the U. S.

Question

Madeline Woods

Business

19 November, 14:01

A pair of running shoes costs $70 in the U. S. If the price of the same shoes is 4500 rupees in India and the exchange rate is 60 rupees per dollar, than the real exchange rate is:A. more than 1, so a profit could be made by buying these shoes in the U. S. and selling them in India. B. more than 1, so a profit could be made by buying these shoes in India and selling them in the U. S. C. less than 1, so a profit could be made by buying these shoes in the U. S. and selling them in India. D. less than 1, so a profit could be made by buying these shoes in India and selling them in the U. S.

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Kasey Bolton · Answer 1

less than 1, so a profit could be made by buying these shoes in the U. S. and selling them in India.

Answer: Option D.

Explanation:

In finance, an exchange rate is the rate at which one currency will be traded for another. It is additionally viewed as the estimation of one nation's money comparable to another cash.

Exchange rate is the cost of one cash regarding another money. Exchange rates can be either fixed or floating. It is the floor value that must be addressed independent of the market cost.