Anonymous asked in Social ScienceEconomics · 1 decade ago

Economic true and false help !?

The exchange rate is the price of one currency in terms of another currency, specifying how many units of foreign currency equal one unit of your country's currency.

The table below reports exchange rate data for August 14, 2003, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the following question.

Foreign Currency U.S. Dollars per Unit of Foreign Currency

Brazilian real $0.3329

Canadian dollar $0.7176

Euro $1.129

Japaneseyen $0.008398

Mexican peso $0.0934

U.K. pound $1.603

1.2. True or False: If the U.S. dollar-euro exchange rate falls to $1.05, this implies the U.S. dollar appreciates and the euro depreciates.

True or False?

1 Answer

  • Favourite answer

    True - you will need less US dollars to purchase one Euro.

    $/€ 1.129→1.05

    Thus you need for $0.079 less to purchase 1€

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