Question

A pen costs £50 in Britain. An identical pen costs $70 in the United States when the exchange rate is £1 = $1.50. Which of the following is correct? Multiple Choice

A. A trader can make money by buying the pen in Britain and selling it in the United States at $70.
B. The deal is the same in both countries.
C. Britain offers a better deal.
D. The U.S. offers a better deal.

Answer 1

Answer: D

Step-by-step explanation:

If you multiply 50×1.50 to get the American value of the pen in Europe it is 75 dollars US, so its cheaper in the US.