Question

In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate?

a. 3.6/3 loaves of British bread per loaf of French bread
b. 3/3.6 loaves of British bread per loaf of French bread
c. 2.7/4 loaves of British bread per loaf of French bread
d. 4/2.7 loaves of British bread per loaf of French bread

Answer 1

c. 2.7/4 loaves of British bread per loaf of French bread

Explanation:

In France a loaf of bread costs 3 euros.

In Great Britain a loaf of bread costs 4 pounds.

The exchange rate is :

1 euro = 0.9 pounds

So, we can calculate the real exchange rate as:

3 euros =
`3*0.9=2.7`

Slo, answer is : 2.7/4 loaves of British bread per loaf of French bread.