Question

The chart below shows an exchange rate table. A 2-column table has 6 rows. The first column is labeled currency with entries Bulgarian Lev, Canadian Dollar, Swiss Franc, British Pound, Japanese Yen, and U.S. Dollar. The second column is labeled exchange rate on April 3, 2013 (Euro = 1) with entries 1.96, 1.301, 1.2149, 0.8482, 119.4065, 1.2839. What is the most likely conclusion that can be drawn about how this table would look in December 2013?

1) It would look the same because exchange rate tables do not change.
2) It would look different because exchange rate tables change constantly.
3) It would look different because exchange rate tables change once a month.
4) It would look different because more countries will have started to use Euros.

Answer 1

The exchange rate table for December 2013 is likely to look different from April 2013 because exchange rates fluctuate frequently due to various economic and geopolitical factors. Historical data from the U.S. dollar's exchange rate with the Japanese yen and Canadian dollar clearly demonstrate that exchange rates are not static.

Step-by-step explanation:

The most likely conclusion that can be drawn about the exchange rate table for December 2013, based on the information provided, is 2) It would look different because exchange rate tables change constantly. Exchange rates are influenced by a variety of factors including economic indicators, market speculation, and geopolitical events, and they fluctuate accordingly. For instance, the exchange rate of the U.S. dollar in terms of the Japanese yen has shown significant changes over time, such as moving from 133 yen/dollar in 2002 to 103 yen/dollar in 2005, and again to 77 yen per dollar in 2012, reflecting these constant changes.

Similarly, the exchange rate between the U.S. dollar and the Canadian dollar has also experienced fluctuations from 1980 onwards, with the U.S. dollar having periods of both appreciation and depreciation against the Canadian dollar. Thus, historical trends indicate that exchange rates do not remain static and are subject to frequent change, making option 2 the most likely scenario.