Question

2.Given the following currency exchange rates:

Time period 1: AUD $1.25/€
Time period 2: AUD $1.50/€
a. From time period 1 to time period 2, € has depreciated relative to AUD$.
A) True
B) False
b. The % change of the value of € from time period 1 to time
period 2 is:
A) -20%
B) +20%
C) -16.25%
D) +16.25%
c. From time period 1 to time period 2, AUDS has appreciated
relative to €.
A) True
B) False
d.The % change of the value of AUD $ from time period 1 to time period 2 is:
A) +20%
B) -20%
C) +16.25%
D) -16.25%

Answer 1

a. True b. -16.25% c. False d. +20%

Step-by-step explanation:

a. True
When the exchange rate changes from AUD $1.25/€ to AUD $1.50/€, it means that it takes more Australian dollars (AUD) to buy one euro (€). This indicates that the euro depreciated relative to the AUD.

b. -16.25%
The percentage change can be calculated using the formula: ((new value - old value) / old value) * 100. In this case, the percentage change is ((1.50 - 1.25) / 1.25) * 100 = 20%, but since it has depreciated, the answer is -20%.

c. False
Since the euro depreciated relative to the AUD, it means that the AUD has appreciated relative to the euro.

d. +20%
Similar to question b, the percentage change in the value of AUD $ from time period 1 to time period 2 is ((1.50 - 1.25) / 1.25) * 100 = 20%, but since it has appreciated, the answer is +20%.

Answer 2

A) The statement "From time period 1 to time period 2, € has depreciated relative to AUD$" is True. The answer is a

B)The percentage change is 20%, so the correct answer is B) +20%.

C). The statement "From time period 1 to time period 2, AUD has appreciated relative to €" is False. The answer is b

D)The percentage change is 20%, so the correct answer is A) +20%.

Step-by-step explanation:

a. In time period 1, 1 Euro (€) was equivalent to AUD $1.25, while in time period 2, 1 Euro (€) became equivalent to AUD $1.50. This means that it took more Australian dollars (AUD) to buy 1 Euro (€) in time period 2 compared to time period 1. Therefore, the Euro (€) has depreciated relative to the Australian dollar (AUD).. The answer is A

b. To calculate the percentage change in the value of the Euro (€) from time period 1 to time period 2, we can use the formula:

Percentage change = ((New value - Old value) / Old value) * 100

In this case, the old value is AUD $1.25/€ and the new value is AUD $1.50/€.

Percentage change = ((1.50 - 1.25) / 1.25) * 100

The percentage change is 20%, so the correct answer is B) +20%.

c. As explained in part a, the Euro (€) has actually depreciated relative to the Australian dollar (AUD) from time period 1 to time period 2.. The answer is b. False

d. To calculate the percentage change in the value of the Australian dollar (AUD) from time period 1 to time period 2, we can use the same formula as in part b.

In this case, the old value is AUD $1.25/€ and the new value is AUD $1.50/€.

Percentage change = ((1.50 - 1.25) / 1.25) * 100

The percentage change is 20%, so the correct answer is A) +20%.