Business, 21.04.2020 16:54 Nobleufia

A U. S. wine merchant travelling in France has found a French wine of the same quality as a U. S. wine they regularly sell. She assumes that the real exchange rate should be 1 case of U. S. wine equals one case of French wine. The French wine merchant will sell her a case of the French wine for 350 euros. She knows that a case of the equivalent U. S. wine sells for $400. The euro is selling in France for $1.20. Assuming transportation costs are zero, the U. S. wine merchant should A. buy the U. S. wine and sell it in France and make a profit. B. buy the French wine and sell it in the U. S. and make a profit. C. It doesn't matter either way; there is no profit in the deal. D. None of the above.

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A U. S. wine merchant travelling in France has found a French wine of the same quality as a U. S. wi...