Which Statement Is True Based On The Exchange Rate Table Below?$\[ \begin{tabular}{|l|l|} \hline Japan YEN & 101.96 \\ \hline China YUAN & 6.2471 \\ \hline Mexico PESO & 12.8575 \\ \hline Canada DOLLAR & 1.0853
Understanding Exchange Rates
Exchange rates are a crucial aspect of international trade and finance. They determine the value of one country's currency in terms of another country's currency. In this article, we will analyze an exchange rate table and determine which statement is true based on the given data.
Exchange Rate Table
| Currency | Exchange Rate |
|---|---|
| Japan YEN | 101.96 |
| China YUAN | 6.2471 |
| Mexico PESO | 12.8575 |
| Canada DOLLAR | 1.0853 |
Statement Analysis
To determine which statement is true, we need to analyze the exchange rate table and understand the relationships between the different currencies. Let's consider the following statements:
- Statement 1: The value of the Japan YEN is greater than the value of the Canada DOLLAR.
- Statement 2: The value of the China YUAN is less than the value of the Mexico PESO.
- Statement 3: The value of the Canada DOLLAR is greater than the value of the Japan YEN.
Mathematical Analysis
To analyze these statements, we need to perform mathematical operations on the exchange rates. Let's start with Statement 1.
Statement 1: Japan YEN vs. Canada DOLLAR
To determine if the value of the Japan YEN is greater than the value of the Canada DOLLAR, we need to compare the two exchange rates.
Japan YEN: 101.96 Canada DOLLAR: 1.0853
Since 101.96 is greater than 1.0853, we can conclude that the value of the Japan YEN is indeed greater than the value of the Canada DOLLAR. Therefore, Statement 1 is true.
Statement 2: China YUAN vs. Mexico PESO
To determine if the value of the China YUAN is less than the value of the Mexico PESO, we need to compare the two exchange rates.
China YUAN: 6.2471 Mexico PESO: 12.8575
Since 6.2471 is less than 12.8575, we can conclude that the value of the China YUAN is indeed less than the value of the Mexico PESO. Therefore, Statement 2 is true.
Statement 3: Canada DOLLAR vs. Japan YEN
To determine if the value of the Canada DOLLAR is greater than the value of the Japan YEN, we need to compare the two exchange rates.
Canada DOLLAR: 1.0853 Japan YEN: 101.96
Since 1.0853 is less than 101.96, we can conclude that the value of the Canada DOLLAR is indeed less than the value of the Japan YEN. Therefore, Statement 3 is false.
Conclusion
In conclusion, based on the exchange rate table, we have determined that:
- Statement 1: The value of the Japan YEN is greater than the value of the Canada DOLLAR. True
- Statement 2: The value of the China YUAN is less than the value of the Mexico PESO. True
- Statement 3: The value of the Canada DOLLAR is greater than the value of the Japan YEN. False
Q&A: Exchange Rate Analysis
In our previous article, we analyzed an exchange rate table and determined which statement is true based on the given data. In this article, we will answer some frequently asked questions related to exchange rate analysis.
Q: What is an exchange rate?
A: An exchange rate is the value of one country's currency in terms of another country's currency. It is a crucial aspect of international trade and finance.
Q: How are exchange rates determined?
A: Exchange rates are determined by the foreign exchange market, which is a global market where currencies are traded. The exchange rate is influenced by a variety of factors, including supply and demand, economic indicators, and government policies.
Q: What is the difference between an exchange rate and a currency?
A: An exchange rate is the value of one currency in terms of another currency, while a currency is a unit of exchange that is issued by a government or central bank.
Q: How do exchange rates affect international trade?
A: Exchange rates can have a significant impact on international trade. A strong exchange rate can make a country's exports more competitive, while a weak exchange rate can make imports more expensive.
Q: What is the relationship between exchange rates and inflation?
A: Exchange rates and inflation are closely related. A country with high inflation may experience a depreciation of its currency, while a country with low inflation may experience an appreciation of its currency.
Q: How do exchange rates affect a country's economy?
A: Exchange rates can have a significant impact on a country's economy. A strong exchange rate can lead to an increase in exports and a decrease in imports, while a weak exchange rate can lead to a decrease in exports and an increase in imports.
Q: What is the difference between a fixed exchange rate and a floating exchange rate?
A: A fixed exchange rate is a system in which the exchange rate is set by the government or central bank, while a floating exchange rate is a system in which the exchange rate is determined by the foreign exchange market.
Q: What are the advantages and disadvantages of a fixed exchange rate?
A: The advantages of a fixed exchange rate include:
- Reduced uncertainty for businesses and investors
- Increased stability for the economy
- Reduced risk of currency fluctuations
The disadvantages of a fixed exchange rate include:
- Reduced flexibility for the economy
- Increased risk of currency manipulation
- Reduced ability to respond to economic shocks
Q: What are the advantages and disadvantages of a floating exchange rate?
A: The advantages of a floating exchange rate include:
- Increased flexibility for the economy
- Reduced risk of currency manipulation
- Increased ability to respond to economic shocks
The disadvantages of a floating exchange rate include:
- Increased uncertainty for businesses and investors
- Increased risk of currency fluctuations
- Reduced stability for the economy
Conclusion
In conclusion, exchange rate analysis is a complex and multifaceted topic that requires a deep understanding of economics, finance, and mathematics. By understanding the basics of exchange rate analysis, businesses and investors can make informed decisions and navigate the complexities of international trade and finance.
Additional Resources
For further reading on exchange rate analysis, we recommend the following resources:
- "Exchange Rates and International Finance" by Ronald MacDonald
- "International Finance" by Mark P. Taylor
- "Exchange Rate Economics" by Ronald MacDonald
We hope this article has provided a comprehensive overview of exchange rate analysis and answered some of the most frequently asked questions related to this topic. If you have any further questions or would like to learn more about exchange rate analysis, please don't hesitate to contact us.