Suppose that the exchange rate between the British pound and gold was £20 per ounce of
Gold and the exchange rate between the U.S. dollar and gold was $80 per ounce of gold. What is the U.S. dollar exchange rate with respect to the British pound?

Question

Quizplus · Accepted Answer

To find the U.S. dollar exchange rate with respect to the British pound, we need to compare their exchange rates with gold. The ratio of the pound to the dollar can be calculated by dividing their respective exchange rates with gold: £20/$80 = 0.25. Therefore, $1 exchanges for £0.25.

Suppose That the Exchange Rate Between the British Pound and Gold