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Question
Microeconomics
Posted 6 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) Russian goods would have been relatively cheaper to tourists
(B) The exchange rate of other currencies relative to the ruble would have increased
(c) It would have taken more of their currency to buy the ruble
(D) Russia's price level would have increased
(E) The exchange rate of the ruble would have decreased
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Answer from Sia
Posted 6 months ago
Solution
a
Exchange Rate Impact: When the Russian ruble appreciates, it means that the value of the ruble increases relative to other currencies
b
Currency Conversion: Tourists heading to Russia would need more of their home currency to buy the same amount of rubles
c
Correct Answer: Therefore, the correct answer is (C) It would have taken more of their currency to buy the ruble
Answer
(C) It would have taken more of their currency to buy the ruble
Key Concept
Currency Appreciation
Explanation
When a currency appreciates, it becomes more expensive relative to other currencies. This means that tourists would need to exchange more of their home currency to obtain the same amount of the appreciated currency.

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