Suppose the cost of a car produced in the United States is $20,000. The current exchange rate is US$1 = €0.55.
Instructions: Round your answers to 2 decimal places.
a. What is the cost of the car in euros?
€
b. Suppose the exchange rate changes to US$1 = €0.60. What is the new euro cost of the car?
€
c. At the new exchange rate, the quantity of U.S. cars demanded by those holding euros will likely (Click to select) remain the same increase decrease .
