Question

One unit of Maruna's currency (druba) was defined as equivalent to 16 grains of "fine" (pure) gold, while one unit of its neighbor, Rashumba's currency (troon) was defined as equivalent to 24 grains of "fine" (pure) gold. Using the gold par value concept (with 480 grains in an ounce), the exchange rate for converting the druba to the troon is__________

Answer 1

The exchange rate for converting the druba to the troon is1 troon = 1.5 druba.

Step-by-step explanation:

The amount in dollar that is obtained as the exchange rate in between two different currencies refers to the par value. This par value of currency depends on the exchange rates. Say for an instance, one British pound has the value of three U.S dollars and if an individual has 100 pounds, then $300 will be the par value in dollars.

The currency devaluations up to 10 percentage were allowed under the Bretton Woods system. This can also be done only getting approvals form the International Monetary Funds. When considering gold, the total amount of currency that is essential in purchasing one ounce of gold is known as gold par value. The exchange rate for converting the druba to the troon is 1 troon = 1.5 druba.