What Is the Exchange Rate Between the Dollar and the British

question 15

Multiple Choice

What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 Pounds in London?

• A) 1.5 dollars per British pound
• B) 0.5 dollars per British pound
• C) 2.5 dollars per British pound
• D) 3.5 dollars per British pound
• E) 2 dollars per British pound

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Definitions:

Price

The financial expenditure expected, essential, or relinquished in payment for something.

Indirect Utility Function

A concept in economics that represents the maximum utility a consumer can achieve with a given income and set prices for goods and services.

Income

Cash inflow, customarily obtained at regular periods, as compensation for work or from investment outcomes.

Constraint

A limitation or restriction on the variables of a problem, often seen in economics as budget constraints affecting consumer choices.