Assume that a product sells for $100 in the United States. a. If the exchange rate between

Question:

Assume that a product sells for $100 in the United States.
a. If the between British pounds and U.S. dollars is $2 per pound, what would the price of the product be in the United Kingdom?
b. If the between Mexican pesos and U.S. dollars is 125 pesos per dollar, what would the price of the product be in Mexico?
c. In which direction would the price of the $100 U.S. product change in a foreign country if Americans’ tastes for foreign products increased?
d. In which direction would the price of the $100 U.S. product change in a foreign country if incomes in the foreign country fell?
e. In which direction would the price of the $100 U.S. product change in a foreign country if interest rates in the United States fell relative to interest rates in other countries?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...