14

If the representative basket of Canadian goods and services costs 40 Canadian dollars, the representative U.S. basket costs 50 US dollars, and the nominal exchange rate is $0.90 per Canadian dollar, then the real exchange rate is 01.125 US basket per Canadian basket 1.125 US baskets per Canadian basket. 0.72 US baskets per Canadian basket. @ $1.125 per Canadian dollar. $0.72 per Canadian dollar