and Japanese rice? To answer this question,
clearance true religion jeans, we must first use the nominal ex-
change rate to convert the prices into a common currency. If the nominal exchange
rate is 80 yen per dollar,
cop glasses, then a price for American rice of $100 per bushel is equiv-
alent to 8,
police glasses frames,000 yen per bushel. American rice is half as expensive as Japanese rice.
The real exchange rate is 1/2 bushel of Japanese rice per bushel of American rice.
We can summarize this calculation for the real exchange rate with the follow-
ing formula:
Nominal exchange rate Domestic price
Real exchange rate .
Foreign price
Using the numbers in our example,
diesel lowky jeans, the formula applies as follows:
(80 yen per dollar) ($100 per bushel of American rice)
Real exchange rate
16,
P90x Workouts,000 yen per bushel of Japanese rice