If the exchange rate is 10 Argentine pesos per U.S. dollar and a slice of pizza in Buenos Aires costs 300 Argentine pesos, then how many U.S. dollars does it take to buy a slice of pizza in Rio?
A)$40 and your purchase will increase Argentina's net exports.
B)$30 and your purchase will increase Argentina's net exports.
C)$30 and your purchase will decrease Argentina's net exports.
D)$40 and your purchase will decrease Argentina's net exports.

Question

Quizplus · Accepted Answer

To find the cost in U.S. dollars, divide the cost in pesos by the exchange rate: 300 pesos / 10 pesos per dollar = $30. Buying a slice of pizza in Buenos Aires with U.S. dollars increases Argentina's net exports because it involves an inflow of foreign currency.

If the Exchange Rate Is 10 Argentine Pesos Per U