Question

You are planning a graduation trip to Mexico. Other things the same, if the dollar appreciates relative to the peso, then

a. the dollar buys fewer pesos. Your hotel room in Mexico will require fewer dollars.
b. the dollar buys fewer pesos. Your hotel room in Mexico will require more dollars.
c. the dollar buys more pesos. Your hotel room in Mexico will require fewer dollars.
d. the dollar buys more pesos. Your hotel room in Mexico will require more dollars.

Answer 1

Hello there!

Answer:

Your answer is C). the dollar buys more pesos. Your hotel room in Mexico will require fewer dollars

Explanation:

The reason why answer choice "C" would be the correct answer is because American currency, USD, would get you a lot of pesos.

Lets give you the exact amount of exchange rate:

1 USD (U.S DOLLAR) = 18.98 PESO

You can see how much 1 U.S dollar could get you in the Mexican currency.

What this means is that the U.S dollar buys more pesos, in which is correct in answer choice "C" Since you could buy more pesos with the U.S dollar, you would only need to use fewer dollars because the exchange rate is so high. The U.S dollar would get you more money in Mexico. This is the reason why answer choice "C" would be correct.