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Question
Statistics
Posted 4 months ago
Suppose the Russian ruble appreciated between May and June 2018.
What would this have meant for tourists heading to Russia to watch the World Cup in June 2018?
Choose 1 answer:
(A) The exchange rate of the ruble would have decreased
(B) Russia's price level would have increased
(C) It would have taken more of their currency to buy the ruble
(D) The exchange rate of other currencies relative to the ruble would have increased
(E) Russian goods would have been relatively cheaper to tourists
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Answer from Sia
Posted 4 months ago
Solution by Steps
step 1
Understand the concept of currency appreciation: When a currency appreciates, it gains value relative to other currencies
step 2
Analyze the impact on tourists: If the Russian ruble appreciates, it means that it will cost more for tourists to exchange their currency for rubles
step 3
Relate the appreciation to the exchange rate: An appreciation of the ruble would mean that the exchange rate of other currencies relative to the ruble would decrease, because you would get fewer rubles for each unit of foreign currency
step 4
Identify the correct answer choice: Based on the concept of currency appreciation, the correct answer choice is the one that reflects the increased cost for tourists to buy rubles
Answer
C
Key Concept
Currency Appreciation
Explanation
When a currency appreciates, it gains value relative to other currencies, making it more expensive for tourists to exchange their home currency for the appreciated currency.
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