Suppose a set of English bone china costing 1,000 pounds costs $3,000 in the United States.After devaluation, the set of china costs $1,000.This change
A) shows that to foreign purchasers, the price of the china is the same before and after the devaluation.
B) makes the china less attractive to foreigner purchasers.
C) makes the china more attractive to foreign purchasers.
D) is irrelevant to foreign purchasers.
E) proves that foreign purchasers would prefer devaluation of the English pound so that it would be worth $2.That way, they could get even more for their dollars.

Question

Quizplus · Accepted Answer

After devaluation, the set of china now costs $1,000, which is equivalent to around 770 pounds (assuming an exchange rate of 1 USD to 0.77 GBP). This means that the price of the china has decreased for foreign purchasers, making it more attractive to them. Option A is incorrect as the price has actually decreased for foreign purchasers. Option B is incorrect as there is no evidence to suggest that the china is now less attractive to foreign purchasers. Option D is incorrect as the devaluation does have an impact on foreign purchasers. Option E is not relevant as it is not a logical conclusion based on the information given.

Suppose a Set of English Bone China Costing 1,000 Pounds