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AP Macroeconomics 6.2 Exchange Rates Questions

Practise interpreting how currencies are quoted against one another, calculating cross-currency prices, and tracking appreciation or depreciation when relative values change.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • interpret the quoted price of one currency in terms of another and calculate its reciprocal
  • convert goods prices between currencies and compare purchasing costs under stated exchange rates
  • determine which currency appreciates or depreciates when a bilateral exchange rate changes

Covered syllabus points

MKT-5.A—a. Define the exchange rate, currency appreciation, and currency depreciation. b. Explain how currencies are valued relative to…

Question 1

[Maximum number: 1]

Italy and Japan are trading partners and have flexible exchange rates. The Italian currency is the euro and the Japanese currency is the yen.

Suppose that the exchange rate between the euro and the yen is 1 euro =100 yen. What is the price of an Italian coat in yen if the coat costs 120 euros in Italy?

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