Suppose the exchange rate is US$1 = ¥100. This means that
A) it takes US$100 to purchase 1 yen.
B) someone with US$1 can purchase 100 yen.
C) the yen will soon fall in value.
D) the exchange rate is out of balance because it should be 1 yen per dollar.

Question

Quizplus · Accepted Answer

An exchange rate of US$1 = ¥100 means that someone with US$1 can purchase 100 yen. Option A is incorrect because it states that it takes US$100 to purchase 1 yen, which is the opposite of the given exchange rate. Option C is unsupported by the information given and Option D is incorrect because the given exchange rate is already stated as US$1 = ¥100, not 1 yen per dollar.

Suppose the Exchange Rate Is US$1 = ¥100