Mary Green takes a summer course in London,England.She doesn't buy British pounds at the U.S.airport,where the rate is 1 pound = $1.60.Upon arrival in London,she finds that she can buy pounds for $1.65 each.Which of the following is true?
A)Green would have been better off if she had bought pounds in the United States where U.S.dollars were cheaper.
B)Green would have been better off if she had bought pounds in the United States where pounds were less expensive.
C)The pounds were more expensive in London because a currency is always most valued in its home country.
D)The pounds were more expensive in the United States because they are less available there.
E)It doesn't matter where she buys the pounds,since she can't use U.S.money anyway once she's in England.

Question

Quizplus · Accepted Answer

Since Mary can buy pounds for $1.65 each in London, it means that pounds are cheaper in London than in the US airport where the rate is 1 pound = $1.60. Therefore, Mary would have been better off buying pounds in the US where pounds were less expensive. Option A is incorrect because it is the opposite of the correct answer. Option C is incorrect because although a currency may be more valued in its home country, it does not mean it will be more expensive there. Option D is incorrect because there is no evidence to suggest that pounds are less available in the US. Option E is incorrect because Mary still needs to exchange her US dollars for pounds to be able to use money in England.

Mary Green Takes a Summer Course in London,England