What is the real exchange rate between Spanish wine and Canadian wine?
The real exchange rate is 0.83 glasses of Spanish wine per glass of Canadian wine. To calculate this, divide the cost of Spanish wine (5 euros) by the cost of Canadian wine (6 Canadian dollars multiplied by the exchange rate of 0.6 euros per Canadian dollar).
Calculating the Real Exchange Rate
Exchange Rate: 0.6 euros per Canadian dollar
Cost of Spanish Wine: 5 euros
Cost of Canadian Wine: 6 Canadian dollars
To calculate the real exchange rate between Spanish wine and Canadian wine, we need to determine how many glasses of Spanish wine you can buy for the price of one glass of Canadian wine.
Given that a glass of Spanish wine costs 5 euros and a glass of Canadian wine costs 6 Canadian dollars, we need to convert the Canadian dollar price into euros using the exchange rate of 0.6 euros per Canadian dollar.
First, we calculate the price of one glass of Canadian wine in euros:
6 Canadian dollars * 0.6 euros per Canadian dollar = 3.6 euros
Now, we can determine the real exchange rate by dividing the cost of Spanish wine (5 euros) by the cost of Canadian wine in euros (3.6 euros):
5 euros / 3.6 euros = 1.39
Therefore, the real exchange rate is approximately 1.39 glasses of Spanish wine per glass of Canadian wine. This means that for the price of one glass of Canadian wine, you can buy approximately 1.39 glasses of Spanish wine.