A British-made automobile is priced at 20,000 (20,000 British pounds). A comparable U.S.-made car costs $26,000. One

Question:

A British-made automobile is priced at £20,000 (20,000 British pounds). A comparable U.S.-made car costs $26,000. One pound trades for $1.50 in the foreign exchange market. Find the real exchange rate from the perspective of the United States and from the perspective of Great Britain. Which country’s cars are more competitively priced? LO4

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