Suppose that the price of a commodity is $3 50 in the United States and 4 in the European Monetary Union and the actual exchange rate between the dollar and the euro is R $1 1, but, the equilibrium exchange rate R $0 75 1 (a) Will the United States import or export this commodity (b) Does the Unite...

a The US will export the commodity b ...

Suppose that the price of a commodity is $3.50 in the United States and 4 in the

Question:

Suppose that the price of a commodity is $3.50 in the United States and €4 in the European Monetary Union and the actual between the dollar and the euro is R = $1/€1, but, the equilibrium R′ = $0.75/€1.
(a) Will the United States import or export this commodity?
(b) Does the United States have a comparative advantage in this commodity? Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...