(1-4) Assume that consumers all around the world only consume Big Macs at MacDonald's. An American tourist found that 50 USD can purchase 30 Big Macs in India, but the same amount of money can only purchase 25 Big Macs in China. The real exchange rate between China and India is A) 1 unit of consumption goods in 5/6 unit of consumption goods in China B) 1 unit of consumption goods in 5/6 unit of consumption goods in India C) 1 unit of consumption goods in India = 2 unit of consumption goods in China D) 1 unit of consumption goods in =

ENGR.ECONOMIC ANALYSIS
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(1-4) Assume that consumers all around the world only consume Big Macs at
MacDonald's. An American tourist found that 50 USD can purchase 30 Big Macs in
India, but the same amount of money can only purchase 25 Big Macs in China. The
real exchange rate between China and India is A) 1 unit of consumption goods in
5/6 unit of consumption goods in China B) 1 unit of consumption goods in
China = 5/6 unit of consumption goods in India C) 1 unit of consumption goods in
India = 2 unit of consumption goods in China D) 1 unit of consumption goods in
India = 1/2 unit of consumption goods in China
Transcribed Image Text:(1-4) Assume that consumers all around the world only consume Big Macs at MacDonald's. An American tourist found that 50 USD can purchase 30 Big Macs in India, but the same amount of money can only purchase 25 Big Macs in China. The real exchange rate between China and India is A) 1 unit of consumption goods in 5/6 unit of consumption goods in China B) 1 unit of consumption goods in China = 5/6 unit of consumption goods in India C) 1 unit of consumption goods in India = 2 unit of consumption goods in China D) 1 unit of consumption goods in India = 1/2 unit of consumption goods in China
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