You are a Swiss girl visiting Barcelona in January 2015. On a shopping tour you buy a black winter coat at Zara for 140. You saw exactly the same coat at a Zara store located in Zrich, where it cost 220 Swiss francs. When you exchanged your Swiss francs for euros, you paid 1.2 Swiss francs for 1. Assuming the winter coat is a representative good, calculate the real exchange rate and interpret your result

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Real Exchange Rate RER is defined as the nominal exchange rate multiplied by the price ratio of dome... View the full answer