Other Exchange Rate - AP Macroeconomics
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Assume the exchange rate from Mexican pesos to American dollars is 8 pesos to $1.
If a bushel of wheat is 12 pesos in Mexico, how many bushels in Mexico could $1200 buy?
Assume the exchange rate from Mexican pesos to American dollars is 8 pesos to $1.
If a bushel of wheat is 12 pesos in Mexico, how many bushels in Mexico could $1200 buy?
There are 8 pesos to the dollar, so multiply 1200 by 8 to get the number of pesos. A bushel costs 12 pesos, so divide by 12 to get 800 bushels.
There are 8 pesos to the dollar, so multiply 1200 by 8 to get the number of pesos. A bushel costs 12 pesos, so divide by 12 to get 800 bushels.
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A country with a high rate of return on investments will likely see which of the following?
A country with a high rate of return on investments will likely see which of the following?
If a nation has an excellent return on investments, that makes investing in that nation more appealing to foreign and domestic investors. Foreigners will exchange their currencies for the currency of the nation with a high rate of return. Domestic investors may take their investments out of foreign markets and invest domestically to take advantage of the high rate of return. This leads to a high demand for the demand currency, meaning people are willing to pay more to recieve that currency. This causes the currency to appreciate in value.
If a nation has an excellent return on investments, that makes investing in that nation more appealing to foreign and domestic investors. Foreigners will exchange their currencies for the currency of the nation with a high rate of return. Domestic investors may take their investments out of foreign markets and invest domestically to take advantage of the high rate of return. This leads to a high demand for the demand currency, meaning people are willing to pay more to recieve that currency. This causes the currency to appreciate in value.
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Choose the correct statement about exchange rates.
Choose the correct statement about exchange rates.
Because an exchange rate is a fluid marker of the equivalent value of two different currencies, two different measures of an exchange rate are necessary. When a transaction is necessary in the moment, the current exchange rate, or a present marker of relative value between currencies, is used. When the transaction is made but scheduled for exchange on a future date, the forward exchange rate, or a projection of future relative value based on recent trends, is used as the exchange rate.
Because an exchange rate is a fluid marker of the equivalent value of two different currencies, two different measures of an exchange rate are necessary. When a transaction is necessary in the moment, the current exchange rate, or a present marker of relative value between currencies, is used. When the transaction is made but scheduled for exchange on a future date, the forward exchange rate, or a projection of future relative value based on recent trends, is used as the exchange rate.
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Assume the exchange rate from Mexican pesos to American dollars is 8 pesos to $1.
If a bushel of wheat is 12 pesos in Mexico, how many bushels in Mexico could $1200 buy?
Assume the exchange rate from Mexican pesos to American dollars is 8 pesos to $1.
If a bushel of wheat is 12 pesos in Mexico, how many bushels in Mexico could $1200 buy?
There are 8 pesos to the dollar, so multiply 1200 by 8 to get the number of pesos. A bushel costs 12 pesos, so divide by 12 to get 800 bushels.
There are 8 pesos to the dollar, so multiply 1200 by 8 to get the number of pesos. A bushel costs 12 pesos, so divide by 12 to get 800 bushels.
Compare your answer with the correct one above
A country with a high rate of return on investments will likely see which of the following?
A country with a high rate of return on investments will likely see which of the following?
If a nation has an excellent return on investments, that makes investing in that nation more appealing to foreign and domestic investors. Foreigners will exchange their currencies for the currency of the nation with a high rate of return. Domestic investors may take their investments out of foreign markets and invest domestically to take advantage of the high rate of return. This leads to a high demand for the demand currency, meaning people are willing to pay more to recieve that currency. This causes the currency to appreciate in value.
If a nation has an excellent return on investments, that makes investing in that nation more appealing to foreign and domestic investors. Foreigners will exchange their currencies for the currency of the nation with a high rate of return. Domestic investors may take their investments out of foreign markets and invest domestically to take advantage of the high rate of return. This leads to a high demand for the demand currency, meaning people are willing to pay more to recieve that currency. This causes the currency to appreciate in value.
Compare your answer with the correct one above
Choose the correct statement about exchange rates.
Choose the correct statement about exchange rates.
Because an exchange rate is a fluid marker of the equivalent value of two different currencies, two different measures of an exchange rate are necessary. When a transaction is necessary in the moment, the current exchange rate, or a present marker of relative value between currencies, is used. When the transaction is made but scheduled for exchange on a future date, the forward exchange rate, or a projection of future relative value based on recent trends, is used as the exchange rate.
Because an exchange rate is a fluid marker of the equivalent value of two different currencies, two different measures of an exchange rate are necessary. When a transaction is necessary in the moment, the current exchange rate, or a present marker of relative value between currencies, is used. When the transaction is made but scheduled for exchange on a future date, the forward exchange rate, or a projection of future relative value based on recent trends, is used as the exchange rate.
Compare your answer with the correct one above