Posted by Karen on Wednesday, November 19, 2008 at 1:00am.
Assume that American rice sells for $100 per bushel, Japanese rice sells for 16,000 yen per bushel, and the nominal exchange rate is 80 yen per dollar. Suppose that rice is the only commodity in the world. What would happen to the real exchange rate between the United States and Japan?
Is it equal to 1? If not, can anyone please correct me and explain it to me?
THANKS A LOT!!!

eco  bobpursley, Wednesday, November 19, 2008 at 6:49am
Based on commodities, then
1 bushel= 1 bushel or
100 dollars= 16000 yen.
or 1 dollar= 160 yen

eco  Mount Olive, Sunday, March 10, 2013 at 10:18pm
Assume that American rice sells for $100 per bushel, Japanese rice sells for 16,000 yen per bushel, and the exchange rate is 80 yen per 1 dollar. Explain how you can make a profit in this situation. What would be your profit per bushel of rice?
Answer This Question
Related Questions
 Econ  Assume that American rise sells for $100 per bushel, Japanese rice sells ...
 Microecomics  Assume that American rise sells for $100 per bushel, Japanese ...
 macroeconomics  assume that American rice sells for 100.00 per bushel, japanese...
 math  A 4pound box of rice, which is a mixture of white rice and wild rice, ...
 Math  The Japanese yen corresponds to the american dollar. If the exchange rate...
 algebra  Wild rice sells for $6 pound, and plain rice sells for $1 per pound. A...
 arithmetic  a recipe for rice pudding uses 1/2 cup of rice and serves 6 people...
 Numerical & Proportional Reasoning  Kendra traveled to Europe and Japan on a ...
 math  Kenyan businessman bought goods from Japan worth 2, 950 000 Japanese yen...
 Math  A dealer bought 5 quintals of rice for Rs.19 per kg paid Rs.500 on ...
More Related Questions