Suppose that beef sells for US$15 per kg in the USA and A$20 per kg in Australia. – Where would you buy beef if the exchange rate was A$1.
Suppose that beef sells for US$15 per kg in the USA and A$20 per kg in Australia.
– Where would you buy beef if the exchange rate was A$1.2 per US$1, and where would you resell beef if you wanted to make a profit? (Assume there are no transport costs, trade barriers or taxes.)
Leave a Reply
Want to join the discussion?Feel free to contribute!