Ron, a journalist, reported that the price of Australian wine had greatly increased along with other Australianmade products imported into the U.S. because of the variation in the exchange rate. He can conclude that the value of the U.S. dollar has:
A) strengthened when compared to the Australian dollar.
B) strengthened when compared to the Australian dollar only if the raw materials for the Australian goods were obtained from the U.S.
C) weakened when compared to the Australian dollar.
D) achieved parity with the Australian dollar only if the shipping companies accept payments in Australian dollars.

Question

Ron, a journalist, reported that the price of Australian wine had greatly increased along with other Australian­made products imported into the U.S. because of the variation in the exchange rate. He can conclude that the value of the U.S. dollar has:
A) strengthened when compared to the Australian dollar.
B) strengthened when compared to the Australian dollar only if the raw materials for the Australian goods were obtained from the U.S.
C) weakened when compared to the Australian dollar.
D) achieved parity with the Australian dollar only if the shipping companies accept payments in Australian dollars.

Quizplus · Accepted Answer

When the value of a country's currency weakens, its imports become more expensive. As reported, the price of Australian wine and other Australian-made products have increased in the US, implying that the value of the Australian dollar has become stronger than the US dollar. Therefore, the best choice is C.

Ron, a Journalist, Reported That the Price of Australian Wine