Which Currency Trade Is NOT Consistent with the Current Exchange

question 117

Multiple Choice

Which currency trade is NOT consistent with the current exchange rates of 500 Chilean pesos for US$1 and £1 sterling for US$1.50?

• A) 1,000 Chilean pesos for US$2
• B) 1,000 Chilean pesos for £2 British pounds
• C) £1,000 for US$1,500
• D) 1,500 Chilean pesos for £2

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Definitions:

Price

The amount of money expected, required, or given in payment for something; it acts as a signal for scarcity or abundance of a product.

Budget Line

A depiction showcasing all feasible combinations of two articles that can be purchased, provided there's a fixed budget and the prices remain the same.

Money Income

Money income is the total income received by a household or individual in the form of currency or in transactions, excluding non-monetary benefits.