Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer?
A) $0.10 = 1 peso
B) $0.08 = 1 peso
C) $0.06 = 1 peso
D) $0.04 = 1 peso

Question

Quizplus · Accepted Answer

The lower the dollar amount needed to purchase a peso, the more pesos an American buyer can get for their dollars, making Mexican goods cheaper for them. Therefore, an exchange rate of $0.04 = 1 peso (D) is most preferable for an American buyer of Mexican goods.

Which of the Following Exchange Rates Between the Dollar and the Peso