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Question
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Posted 3 months ago

Flora is traveling from Argentina to Russia to watch the World Cup. The currency of Argentina is the peso, the currency of Russia is the ruble, and the exchange rate is 1 peso equals 2 rubles.

Which of the following can be concluded based on this exchange rate?
Choose 1 answer:
(A) The exchange rate of the peso is 1 peso per 2 rubles
(B) A ruble buys twice as many goods as a peso
(C) The exchange rate of the ruble is 0.5 pesos per ruble
(D) The ruble has depreciated
(E) The ruble has appreciated
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Answer from Sia
Posted 3 months ago
Solution by Steps
step 1
To understand the exchange rate, we interpret the given information: 1 peso equals 2 rubles. This means for every peso, you get 2 rubles
step 2
To find the exchange rate of the ruble in terms of pesos, we take the reciprocal of the given exchange rate: 12 rubles per peso \frac{1}{2} \text{ rubles per peso} which simplifies to 0.5 pesos per ruble
step 3
We cannot conclude whether the ruble has appreciated or depreciated without historical exchange rate data for comparison
step 4
We cannot conclude that a ruble buys twice as many goods as a peso without information on the purchasing power parity or the cost of goods in both countries
Answer
C
Key Concept
Exchange Rate Calculation
Explanation
The exchange rate of the ruble in terms of pesos is found by taking the reciprocal of the given exchange rate, which is 0.5 pesos per ruble.

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