Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 25 - The Balance of Payments, Exchange Rates, and Trade Deficits - Discussion Questions - Page 579: 5


The answer is below.

Work Step by Step

The ratio of the USD to the Euro has to do with how much each currency can buy. Thus, this ratio has to do with how much each currency inflates or deflates. Currently, 1 USD is worth .86 Euro.
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