Suppose that a Swiss watch that costs 400 francs in Switzerland costs $200 in the United States.The exchange rate between the franc and the dollar is
A) 2 francs per dollar.
B) 1 franc per dollar.
C) $2 per franc.
D) $3 per franc.

Question

Quizplus · Accepted Answer

The correct exchange rate is 2 francs per dollar because if a watch that costs 400 francs in Switzerland is equivalent to $200 in the United States, dividing 400 francs by $200 gives an exchange rate of 2 francs per dollar.

Suppose That a Swiss Watch That Costs 400 Francs in Switzerland