4. Pricing foreign goods # Pricing Foreign GoodsThe nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency.Suppose the following table presents nominal exchange rate data for February 28, 2019, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow.| **Foreign Currency** | **Cost of One Unit of Foreign Currency (Dollars)** ||--------------------------|----------------------------------------------------|| Brazilian real (BRL) | 0.4755 || Canadian dollar (CAD) | 0.8666 || Euro (EUR) | 1.2151 || Japanese yen (JPY) | 0.008538 || Mexican peso (MXN) | 0.0942 || United Kingdom pound (GBP) | 1.7552 |Suppose that on February 28, an antique woven tapestry handmade in the United Kingdom is priced at GBP 1,710. The approximate U.S. dollar price of the tapestry would be _________.If the nominal exchange rate for the U.S. dollar–Mexican peso rises from $0.0942 to $0.11775 per Mexican peso, the Mexican peso _________ in value, or _________, relative to the U.S. dollar.

Nominal exchange rate shows how much unit of one currency is to be paid for one unit of other…

4. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table presents nominal exchange rate data for February 28, 2019, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. Foreign Currency Brazilian real (BRL) Canadian dollar (CAD) Euro (EUR) Japanese yen (JPY) Mexican peso (MXN) $974 United Kingdom pound ( Suppose that on February 28, price of the tapestry would be $2,401 $3,002 Cost of One Unit of Foreign Currency (Dollars) 0.4755 0.8666 $3,602 1.2151 0.008538 0.0942 1.7552 antique woven tapestry handmade in the United Kingdom is priced at GBP 1,710. The approximate U.S. dollar If the nominal exchange rate for the U.S. dollar-Mexican peso rises from $0.0942 to $0.11775 per Mexican peso, the Mexican peso value, or , relative to the U.S. dollar. in

4. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency. Suppose the following table presents nominal exchange rate data for February 28, 2019, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow. Foreign Currency Brazilian real (BRL) Canadian dollar (CAD) Euro (EUR) Japanese yen (JPY) Mexican peso (MXN) $974 United Kingdom pound ( Suppose that on February 28, price of the tapestry would be $2,401 $3,002 Cost of One Unit of Foreign Currency (Dollars) 0.4755 0.8666 $3,602 1.2151 0.008538 0.0942 1.7552 antique woven tapestry handmade in the United Kingdom is priced at GBP 1,710. The approximate U.S. dollar If the nominal exchange rate for the U.S. dollar-Mexican peso rises from $0.0942 to $0.11775 per Mexican peso, the Mexican peso value, or , relative to the U.S. dollar. in

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Chapter1: Making Economics Decisions

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4. Pricing foreign goods

# Pricing Foreign Goods

The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency.

Suppose the following table presents nominal exchange rate data for February 28, 2019, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow.

| **Foreign Currency** | **Cost of One Unit of Foreign Currency (Dollars)** |
|--------------------------|----------------------------------------------------|
| Brazilian real (BRL) | 0.4755 |
| Canadian dollar (CAD) | 0.8666 |
| Euro (EUR) | 1.2151 |
| Japanese yen (JPY) | 0.008538 |
| Mexican peso (MXN) | 0.0942 |
| United Kingdom pound (GBP) | 1.7552 |

Suppose that on February 28, an antique woven tapestry handmade in the United Kingdom is priced at GBP 1,710. The approximate U.S. dollar price of the tapestry would be _________.

If the nominal exchange rate for the U.S. dollar–Mexican peso rises from $0.0942 to $0.11775 per Mexican peso, the Mexican peso _________ in value, or _________, relative to the U.S. dollar.

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