Suppose the Real Exchange Rate Is 1

question 15

Multiple Choice

Suppose the real exchange rate is 1.25 pounds of bananas in Guatemala per pound of bananas in the U.S.If a pound of bananas in the U.S.costs $.50,and the exchange rate is 10 Guatemalan Quetzals per dollar,what is the price of bananas in Guatemala?

• A)2.50 Quetzals per pound
• B)4.00 Quetzals per pound
• C)5.75 Quetzals per pound
• D)6.25 Quetzals per pound

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Definitions:

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet the production needs of a business.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.