D) more; weaken t the: 2015 1.5 euros 2 Brazilian reais (real) 2 British pounds

Question

D) more; weaken t the: 2015 1.5 euros 2 Brazilian reais (real) 2 British pounds 45 Indian rupees 2016 euro Currency $1 S1 S1 1.5 Brazilian reais (real) 3 British pounds 50 Indian rupees A) British pound and the Indian rupee B) euro and the Indian rupee. C) euro and the Brazilian real. D) euro and the Indian rupee. 8. Using exchange rates, it is possible to price-compare in different nations. If an iPod costs $90 in the United States and 45 in France, in which nation would you get the better deal when the dollar-euro exchange rate is $2.50/E? A) The iPod would be cheaper in France. B) The iPod would be cheaper in the United States. C) The iPod would cost the same in both countries. D) From the information provided, it is impossible to answer this question. na in which the

Explanation / Answer

7. A British pound and Indian rupee.

Explanation: The dollar can be said to have appreciated when the purchasing power of a unit of dollar increases. $1 could buy 1.5 euros in 2015 and 1 euro in 2016. So, the purchasing power of dollar declined with respect to euro. So, the dollar depreciated with respect to euro. Similarly, the dollar depreciated against the Brazilian reais (real).

Now, $1 could buy 2 British pounds in 2015 and 3 British pounds in 2016. So, the purchasing power of dollar increased with respect to British pounds. So, the dollar appreciated with respect to the British pound. Similarly, the dollar appreciated with respect to the Indian rupee.

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