Consider an Apple iPod that costs $240. a. If the euro-dollar exchange rate is 1 euro per

Question:

Consider an Apple iPod that costs $240.
a. If the euro-dollar is 1 euro per dollar, so that it costs a Euro-pean 1 euro to buy a dollar, how much will the iPod cost in France?
b. If the euro-dollar falls to 0.8 euro per dollar, how much will the iPod cost in France?
c. Consequently, what will happen to French purchases of iPods and the amount of dollars demanded in the as the euro-dollar falls?
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... Foreign Exchange Market
The foreign exchange market (also known as forex, FX or the currency market) is an over-the-counter (OTC) global marketplace that determines the exchange rate for currencies around the world. Participants are able to buy, sell, exchange and...