Question

me: 1 hour, 21 minutes, 14 seconds. Question Completion Status: natically. in one sitting. Do not leave the test before when time 30 seconds rem Moving to another question will save this response. Question 5 Americans visiting Europe would prefer an exchange rate of $1.40 = 1 euro rather than $1.20 = 1 euro. True False → A Moving to another question will save this response.

Answer 1

Please rate answer
Answer False

While visiting Europe, Americans will need European currency for their spending abroad . They would have to convert their own currency (dollars) into Euros . They will prefer the lowest rate . They will prefer 1.2$ over 1.4 $ as they would the price is less . They will be able to buy goods worth (1/1.2) 0.83 $ in Europe with 1 Euro when they exchange at the rate of 1.2 $ per Euro . On the other hand , when they exchange at 1.4 $ per Euro , they will be able to buy goods worth (1/1.4) = 0.714 $ in Europe with one Euro .
In easy words , at the rate of 1.2 $ per Euro they will be able to buy more Euros per dollar as comapred to 1.4 $ per Euro .