If you are vacationing in France and the dollar depreciates relative to the euro, then a. the dollar buys more euros. It will take more dollars to buy a good that costs 50 euros. b. the dollar buys fewer euros. It will take fewer dollars to buy a good that costs 50 euros. c. the dollar buys fewer euros. It will take more dollars to buy a good that costs 50 euros. d. the dollar buys more euros. It will take fewer dollars to buy a good that costs 50 euros.

Question

Theresa Harrison

Business

21 January, 08:13

If you are vacationing in France and the dollar depreciates relative to the euro, then a. the dollar buys more euros. It will take more dollars to buy a good that costs 50 euros. b. the dollar buys fewer euros. It will take fewer dollars to buy a good that costs 50 euros. c. the dollar buys fewer euros. It will take more dollars to buy a good that costs 50 euros. d. the dollar buys more euros. It will take fewer dollars to buy a good that costs 50 euros.

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Answers (1)

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Ayla Duffy · Answer 1

c. the dollar buys fewer euros. It will take more dollars to buy a good that costs 50 euros.

Explanation:

When a currency depreciates, it will decrease their value in relathinship wth the other currency.

This means the dollar will buy less euros.

This makes statment A and D FALSE.

If the dollar is worth less then, the amount of dollar required for a given amount (50) will be higher,

it takes more dollars to buy 50 euros of goods.

Option C is the only statment which express both situation.