Economics 2281 · O Level · Foreign exchange rates

Foreign exchange rates — practice question

A product from Argentina is first sold in the US at $50 when the exchange rate between the two countries is 5 pesos to 1 dollar. The exchange rate then changes to 10 pesos to 1 dollar, while the product’s price in Argentina stays the same. What is the new price of the product in the US?

  • A$5
  • B$25
  • C$100
  • D$500

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