Question

If one U.S. dollar equals one euro, which of these could result if the euro experiences inflation? E.U. citizens could purchase more goods in the U.S. for less money. E.U. citizens would purchase large amounts of U.S. stock. U.S. citizens would purchase more goods from the E.U. for less money. U.S. citizens would purchase large amounts of E.U. stock.

Answer 1

Answer:

U.S. citizens would purchase more goods from the E.U. for less money

Explanation:

In this scenario $1=€1, and when inflation occurs the purchasing power of the Euro will reduce.

One will need more euros to buy goods, for example if I buy a shirt for €3 the price may now be €5. So more euros are needed to buy the same goods.

Since the dollar did not experience inflation, its purchasing power will remain the same and stronger than the euro.

Thus the dollar will be able to now but more goods compared bro the euro.

Answer 2

An increment in the cost of commodities and services in the marketplace is called inflation. It is the frequency at which the price of the money drops.

The correct answer is:

Option C. U.S. citizens would purchase more goods from the E.U

This can be explained as:

• In the question, the price of one American dollar is equal to one euro. If a boom happens then the value of the euro will fall.

• The purchasing authority of the Europeans will reduce due to the high currency rate.

• To purchase any assets Europeans will have to pay more Euros.

• The dollar will not be concerned as it did not undergo inflation and its purchasing strength will remain the same and more than the euro.

Therefore, the dollar will be able to purchase more goods compared to the euro.

To learn more about inflation and its effect follow the link:

https://brainly.com/question/10911642