Table 15.2 Costs, prices and exchange rates

-Refer to Table 15.2. The international price data at different exchange rates show that trade between the US and the UK would require an exchange rate of:

Question

Table 15.2 Costs, prices and exchange rates
 
-Refer to Table 15.2. The international price data at different exchange rates show that trade between the US and the UK would require an exchange rate of:

Quizplus · Accepted Answer

For trade to be mutually beneficial, the exchange rate must make the price of goods relatively cheaper in one country and more expensive in the other, creating an incentive for trade. Without the specific data from Table 15.2, the correct answer cannot be determined based on the information provided. However, assuming the question implies that option C is the rate that balances trade incentives between the US and the UK, it suggests that at an exchange rate of $2.00 = £1, goods or services priced in one currency would be appealing to buyers using the other currency, facilitating trade.

Table 15.2 Costs, Prices and Exchange Rates