With an exchange rate of 0.73 euros for 1 dollar, a US company is able to purchase 100 trucks from Germany. If the exchange rate shifted to 1 euro for 1 dollar, what would happen to the price the US company would pay for trucks? A)The price would go down, because the US dollar has appreciated. B)The price would go up, because the US dollar has depreciated. C)The price would go up, because the US dollar has appreciated. D)The price would go down, because the US dollar has depreciated.
With an exchange rate of 0.73 euros for 1 dollar, a US company is able to purchase 100 trucks from Germany. If the exchange rate shifted to 1 euro for 1 dollar, what would happen to the price the US company would pay for trucks? A)The price would go down, because the US dollar has appreciated. B)The price would go up, because the US dollar has depreciated. C)The price would go up, because the US dollar has appreciated. D)The price would go down, because the US dollar has depreciated.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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With an exchange rate of 0.73 euros for 1 dollar, a US company is able to purchase 100 trucks from Germany. If the exchange rate shifted to 1 euro for 1 dollar, what would happen to the
A)The price would go down, because the US dollar has appreciated.
B)The price would go up, because the US dollar has depreciated.
C)The price would go up, because the US dollar has appreciated.
D)The price would go down, because the US dollar has depreciated.
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