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If a loaf of bread costs $4 in the U.S. and 5 francs in Switzerland, then according to absolute purchasing power parity a. the U.S.-Swiss
If a loaf of bread costs $4 in the U.S. and 5 francs in Switzerland, then according to absolute purchasing power parity
a. | the U.S.-Swiss real exchange rate (q S//franc) will equal 4/5 | |
b. | the U.S.-Swiss real exchange rate will equal 5/4 | |
c. | the U.S.-Swiss nominal exchange rate (E S/franc) will equal 4/5 | |
d. | the U.S.-Swiss nominal exchange rate will equal 5/4 |
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