To find out how many dollars it takes to buy a meal in Rio costing 20 reals when the exchange rate is 2 Brazilian reals per dollar, you can use the following calculation:
-
Convert reals to dollars:
- A meal costs 20 reals.
- At an exchange rate of 2 reals per dollar, you can find the dollar equivalent by dividing the number of reals by the exchange rate: \[ \text{Dollars} = \frac{\text{Reals}}{\text{Exchange Rate}} = \frac{20 \text{ reals}}{2 \text{ reals/dollar}} = 10 \text{ dollars} \]
-
Impact on net exports:
- When you buy a meal in Brazil (an activity that involves spending money in the local economy), it typically does not involve exports because you are consuming a domestic product. Therefore, your purchase does not directly increase net exports; in fact, it is a domestic purchase, which means it does not enter into the export calculations.
- However, since the transaction involves an American buying a Brazilian product, from the perspective of the U.S., it represents an outflow of dollars and is thus a decrease in U.S. net exports, but an inflow of reals into the Brazilian economy.
Based on this information:
The answer is b. $10 and your purchase will decrease Brazil's net exports.
1 answer