The Nominal Exchange Rate is 11 Mexican Pesos for 1 US Dollar

A bottle of vanilla in the US is $15. A bottle of vanilla in Mexico is 140 Pesos. Do the following to calculate the Real Exchange Rate: Converting US price to foreign currency, you have: _$15 * 11 = 165 pesos_ Spending that foreign currency in the foreign country, you can buy how many goods: _ 165 / 140 = 1.18 = real exchange rate _ Is the real ... ................
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