You have decided to purchase, directly from the French manufacturer, a helicopter that costs 800,000 euros. At the equilibrium exchange rate between dollars and euros in Figure 36.1, this purchase will cost you
A. $200,000.
B. $400,000.
C. $1,600,000.
D. $800,000.
Answer: B
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China linked its exchange rate to the U.S. dollar which meant in the 2004-2007 period
A) it appreciated against most other currencies, hurting its manufacturing competitiveness. B) it depreciated against most other currencies, making its products cheaper. C) it decreased the size of its merchandise trade surplus. D) it overvalued its currency, making it hard to attract foreign investment.
What country is the largest holder of foreign debt in the world?
A. U.S.A B. China C. Germany D. United Kingdom E. Russia
A firm that has taken advantage of economies of scale and expanded to become the only producer in the market is
A) a cartel. B) a natural monopoly. C) a monopolistic competitor. D) an oligopolist.
The concept of purchasing power parity illustrates the relationship between the national price levels and exchange rates in the long-run.
Answer the following statement true (T) or false (F)