Question: 3. Computing real exchange rates Consider a bundle of consumer goods that costs $80 in the United States. The same bundle of goods costs GHQ

3. Computing real exchange rates

Consider a bundle of consumer goods that costs $80 in the United States. The same bundle of goods costs GHQ 24 in Ghana. Holding constant the cost of the bundle in each country, compute the real exchange rates that would result from the two nominal exchange rates in the following table. Cost of Bundle in U.S. Cost of Bundle in Ghana Nominal Exchange Rate Real Exchange Rate (Dollars) (Cedis) {Cedls per dollar) ( Bundles of Ghanaian goods per bundle of 0.5. goods) 80 24 1.50 |:| l:l SD 24 0.75

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