If 5 Swiss francs trade for $1, the U.S. price level equals $1 per good, and the Swiss price level equals 2 francs per good, the

Question

NemiM [27]

3 years ago

12

If 5 Swiss francs trade for $1, the U.S. price level equals $1 per good, and the Swiss price level equals 2 francs per good, the

n the real exchange rate between Swiss goods and U.S. goods is ______ Swiss good(s) per U.S. good.

Business

2 answers:

Gnoma [55] · Answer 1 · 2021-12-21T04:14:29+03:00

Gnoma [55]3 years ago

8 0

Answer:

0.4 swiss goods per US goods.

Explanation:

nordsb [41] · Answer 2 · 2021-12-21T02:19:09+03:00

Answer:

0.4 swiss good(s) per U.S good(s)

Explanation:

firstly we calculate how many dollars we get per Frank so we will say $1/ 5 Swiss Franks =$0.2 which is similar to (5x =1, solve for x =1/5 / 0.2 in simple maths )per Swiss Franc thereafter we calculate the how many Swiss Francs per good compared to dollars per good we can get so therefore 2 Swiss Francs per good/$1 per good is the ratio of comparison , hence we treat f(X) as a function of swiss good(s) per U.S good, therefore f(X)= 2 x , knowing that x= 0.2 f(x)= 2(0.2) which will result in f(x)= 0.4.