If purchasing-power parity holds, then the value of the a. real exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U. S. price level divided by the foreign country's price level. b. nominal exchange rate is equal to one. A dollar buys the quantity of foreign currency equal to the U. S. price level divided by the foreign country's price level. c. real exchange rate is equal to one. A dollar buys as many goods in the U. S. as it does overseas. d. nominal exchange rate is equal to one. A dollar buys as many goods in the U. S. as it does overseas.
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