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AP Macroeconomics Mkt 5 A a Define the Exchange Rate Currency Appreciation and Currency Depreciation B Explain How Currencies Are Valued Relative to Questions

Practise reading bilateral exchange-rate quotes, converting prices between currencies, and deciding which currency appreciates or depreciates as relative values change.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • define an exchange rate as the price of one currency expressed in units of another
  • calculate a bilateral exchange rate or its reciprocal from a quoted currency relationship
  • convert a foreign price into another currency and compare the same good's cost across countries
  • identify appreciation and depreciation from old and new rates, using the inverse relationship between currencies

AP Macroeconomics Mkt 5 A a Define the Exchange Rate Currency Appreciation and Currency Depreciation B Explain How Currencies Are Valued Relative to Questions 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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