Suppose the exchange rate in the year 2010 was 4 yuan per dollar and in 2011 the exchange rate fell to 3 yuan per dollar.If the price of a Chinese sweater was 120 yuan in both years,the new dollar price in 2011 would be ________ and imports of Chinese sweaters would ________.
A)$40;increase
B)$30;decrease
C)$40;decrease
D)$30;increase
E)$40;stay the same because the price stayed the same at 120 yuan

Question

Quizplus · Accepted Answer

To find the new dollar price in 2011, we need to convert the price from yuan to dollars using the exchange rate for each year.

In 2010, the sweater cost 120 yuan, which is equal to 120/4 = 30 dollars. 
In 2011, the sweater cost 120 yuan, which is equal to 120/3 = 40 dollars.

Therefore, the new dollar price in 2011 is $40.

Imports of Chinese sweaters would decrease because the price in dollars increased, making it more expensive to import them.

Suppose the Exchange Rate in the Year 2010 Was 4