MINDTAP Problems (Ch 18) Due Today at 11:59 PM EST e Back to Assignment Attempts

Question

MINDTAP Problems (Ch 18) Due Today at 11:59 PM EST e Back to Assignment Attempts:Keep the Highest: 12 6. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal 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 presents nominal exchange rate data for November 26, 2014, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow Cost of One Unit of Foreign Currency Foreign Currency Brazilian real (BRL) dian dollar (CAD) Euro (EUR) apanese yen (JPY) Mexican peso (MXN) United Kingdom pound (GBP) 0.3666 0.8493 1.3288 0.009748 0.0889 1.8965 handmade in Brazil is priced at BRL 2.750. Suppose that on November 26, 2014, a marble statue The approximate U.S. dollar price of the statue would be If the nominal exchange rate for the U.S. dollar-euro rises from $1.3288 to s1.52812 per euro, the euro " in valuc, or relative to the U.S. dollar, javascript:onClickProblemSetitem(/at/servlet/quiz?quiz action takeQuiz&quiz; probGuid-Q4PLCOABO10100000

Explanation / Answer

Suppose that on november 26, 2014, a marble statue handmade in brazil is priced at BRL 2,750 . The approximate U.S dollar price of the statue would be 2,750/0.3666 = 7,501.36 U.S dollars.

If the nominal xchange rate for the U.S dollar -euro rises from $1.3288 to $1.52812 per Euro ,the Euro= 1/1.52812= 0.65439 in value, relative to the 1.52812 U.S dollar.

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