DQuestion 16 1 pts The following table shows the number of U.S. dollars required
ID: 1129363 • Letter: D
Question
DQuestion 16 1 pts The following table shows the number of U.S. dollars required to buy one Mexican peso and the number of U.S. dollars required to buy one Japanese yen between June 1, 2016, and September 1, 2016. Use this table to answer the following questions Date June 1, 2016 July 1, 2016 August 1, 2016 September 1, 2016 U.S. Dollars Required to Buy 1 Mexican Peso 0.0536 0.0537 0.0541 0.0520 U.S. Dollars Required to Buy 1 Japanese Yen 0.0095 0.0096 0.0099 0.0098 Between June 1, 2016, and July 1, 2016, the number of U.S. goods exported to Mexico likely increased because U.S. goods became more expensive to consumers in Mexico Odecreased because U.S. goods became more expensive to consumers in Mexico. O increased because U.S, goods became less expensive to consumers in Mexico. decreased because us goods became less expensive to consumers in Medico O did not change because exchange rates do not affect trade.Explanation / Answer
The correct answer is: C)
Reason: Exchange rate do affect imports and exports.
On June 1 2016, exchange rate for Mexico = 1/0.0536
= 18.6567
And,
On July 1 2016, exchange rate for Mexico = 1/0.0537
= 18.6219
Clearly, the exchange rate for Mexico has fallen I.e US goods have become less expensive for Mexico and thus US exports are likely to increase.
Thanks!
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