6. Computing real exchange rates Consider a basket of consumer goods that costs $90 in the United States. The same baske

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6 Computing Real Exchange Rates Consider A Basket Of Consumer Goods That Costs 90 In The United States The Same Baske 1 (13.07 KiB) Viewed 59 times

6. Computing real exchange rates Consider a basket of consumer goods that costs $90 in the United States. The same basket of goods costs CNY 105 in China. Holding constant the cost of the basket in each country, compute the real exchange rates that would result from the two nominal exchange rates in the following table. Cost of Basket in U.S. (Dollars) 90 Cost of Basket in China (Yuan) Nominal Exchange Rate (Yuan per dollar) 7.00 Real Exchange Rate (Baskets of Chinese goods per basket of U.S. goods) 105 90 105 10.50