Suppose the US dollar price of a British pound is $1.50; the dollar price of a euro is $1; a hotel room in London , England , cost 120 British pounds; and a comparable hotel room in Hanover, Germany , costs 200 euro. a. Which hotel room is cheaper for US tourist? b. What is the exchange rate between the euro and the British pound ?
Suppose the US dollar price of a British pound is $1.50; the dollar price of a euro is $1; a hotel room in London , England , cost 120 British pounds; and a comparable hotel room in Hanover, Germany , costs 200 euro. a. Which hotel room is cheaper for US tourist? b. What is the exchange rate between the euro and the British pound ?
Chapter6: An Introduction To The Foreign Exchange Market And The Balance Of Payments
Section: Chapter Questions
Problem 12E
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Suppose the US dollar price of a British pound is $1.50; the dollar price of a euro is $1; a hotel room in London , England , cost 120 British pounds; and a comparable hotel room in Hanover, Germany , costs 200 euro.
a. Which hotel room is cheaper for US tourist?
b. What is the exchange rate between the euro and the British pound ?
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