Sia
Question
Statistics
Posted 9 months ago
Flora is traveling to Russia from Argentina for the World Cup to root for Argentina in their match against Iceland. The currency of Argentina is the peso, and the currency of Russia is the ruble.
If Flora hears that the peso has appreciated, which of the following best describes the impact the appreciation has on her trip?
Choose 1 answer:
(A) The number of pesos it takes to buy a ruble is smaller than the number of rubles it takes to buy a peso.
(B) Her purchasing power has decreased.
(c) Her purchasing power has increased.
(D) The value of the peso and the ruble are now equal to each other.
(E) The number of pesos it takes to buy a ruble is higher than the number of rubles it takes to buy a peso.
Sign in to unlock the answer
Answer from Sia
Posted 9 months ago
Solution by Steps
step 1
Understand the concept of currency appreciation: When a currency appreciates, it gains value relative to another currency
step 2
Apply the concept to the scenario: If the Argentine peso has appreciated, it means that each peso now buys more rubles than before
step 3
Determine the impact on purchasing power: As Flora can get more rubles for her pesos, her purchasing power in Russia increases
Answer
C
Key Concept
Currency Appreciation and Purchasing Power
Explanation
When a currency appreciates, the purchasing power of that currency increases abroad, allowing one to buy more foreign currency with the same amount of domestic currency.
Not the question you are looking for? Ask here!
Enter question by text
Enter question by image
Unlock Smarter Learning with AskSia Super!
Join Super, our all-in-one AI solution that can greatly improve your learning efficiency.
30% higher accuracy than GPT-4o
Entire learning journey support
The most student-friendly features
Study Other Question