Q:

Three-wheel cars made in North Edsel are sold for 5000 pounds.​ Four-wheel cars made in South Edsel are sold for​ 10,000 marks. The real exchange rate between North and South Edsel is four​ three-wheel cars for three​ four-wheel cars. The nominal exchange rate between the two countries is _______

Accepted Solution

A:
Answer:1.50 marks per poundStep-by-step explanation:Data provided in the question: Selling price of three-wheel cars made in North Edsel = 5000 poundsSelling price of four-wheel cars made in south Edsel = 10,000 marksReal exchange rate between North and South Edsel = four​ three-wheel cars for three​ four-wheel carsi.e⇒ 4 × 5000 pounds  = 3 × 10,000 marksor1 pounds = [ ( 3 × 10,000 ) ÷ ( 4 × 5,000) ]or1 pound = 30,000 ÷ 20,000or1 pound = 1.50 marksHence,The nominal exchange rate = 1.50 marks per pound