The exchange rate is the price of one currency in terms of another currency. An exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table forecasts exchange rate data for May 21, 2018, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. Foreign Currency Cost of One
The exchange rate is the price of one currency in terms of another currency. An exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table forecasts exchange rate data for May 21, 2018, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. Foreign Currency Cost of One
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter19: International Finance And The Foreign Exchange Market
Section: Chapter Questions
Problem 4CQ
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The exchange rate is the price of one currency in terms of another currency. An exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency.
Suppose the following table forecasts exchange rate data for May 21, 2018, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow.
Foreign Currency
|
Cost of One Unit of Foreign Currency
|
---|---|
(Dollars)
|
|
Lithuanian litas (LTL) | 0.3666 |
Canadian dollar (CAD) | 0.8493 |
Euro (EUR) | 1.3288 |
Mexican peso (MXN) | 0.0889 |
United Kingdom pound (GBP) | 1.8965 |
Suppose that on May 21, 2018, an ornamental bookcase handmade in the United Kingdom is priced at GBP 530. The approximate U.S. dollar price of the bookcase would be .
If the exchange rate for the U.S. dollar–U.K. pound rises from $1.8965 to $2.2758 per U.K. pound, the U.S. dollar in value, or , relative to the U.K. pound.
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