Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

If the exchange rate is Rs 80 for a dollar, what would be the cost of a shirt of Rs 800 in US dollar ?

Options:

$100

$10

$8

$0.8

Correct Answer:

$10

Explanation:

The correct answer is option (2) : $10

Exchange rate is ₹80 for a dollar,

Cost in US dollars =$\frac{ (\text{Cost in Indian Rupees})}{(\text{Exchange Rate} )}$

Cost in US dollars = (800 INR)/ (80 INR/ USD ) = 10 USD

So, the cost of the shirt is **$10** in US dollars.