Suppose That the Current Exchange Rate Between the Dollar and Peso

question 254

Multiple Choice

Suppose that the current exchange rate between the dollar and peso is $1 equals 10 pesos. If the exchange rate changes to $1 equals 8 pesos, which of the following is true?

• A) The dollar depreciates and U.S. exports become cheaper.
• B) The dollar appreciates and U.S. exports become cheaper.
• C) The peso depreciates and imports from Mexico become cheaper.
• D) The peso appreciates and imports from Mexico become cheaper.

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Definitions:

Carrying Cost

The full expenditure of keeping stock on hand, covering expenses related to storing, managing, value reduction, and the cost of alternative opportunities forgone.

Multiple Discriminant Analysis (MDA)

Statistical technique for distinguishing between two samples on the basis of their observed characteristics.

Statistical Technique

A method or formula derived from statistical science used to analyze, interpret, and collect data.

Samples

Small portions or quantities intended to show what the whole is like.