You are a U.S.importer of goods from Switzerland.You owe your supplier 1,000 Swiss Francs for goods recently purchased.You had a choice for paying for the goods the day you purchased them or paying for them 30 days later.On the day the goods were purchased the exchange rate was 1 Swiss franc = $0.78 (one franc costs $0.78 cents).Thirty days later,the exchange rate is 1 Swiss franc = $0.87 (one franc costs $0.87).You waited the 30 days to pay the bill.Which of the following statements is true?
A)You were worse off
B)You were better off
C)It did not matter
D)The value of the Swiss franc relative to the U.S.dollar went down

Question

Quizplus · Accepted Answer

By waiting 30 days to pay the bill, the exchange rate changed from $0.78 to $0.87 per Swiss Franc, meaning it became more expensive to purchase Swiss Francs with U.S. dollars. Therefore, you ended up paying more than you would have if you had paid on the day of purchase.

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