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aleksley [76]
3 years ago
14

According to The Economist​, in early 2004 the average price of a tall​ latté in Starbucks in the United States was​ $2.80. In t

he countries that use the​ euro, the average price was 2.93 euros. Because the exchange rate at this time was 0.79 euro per​ dollar, the dollar price of​ lattés in the euro area was​ $3.70.At what exchange rate between the dollar and the euro would a latté cost the same in the euro area as it did in the United States?
Social Studies
1 answer:
Setler79 [48]3 years ago
5 0

Answer:

  • <em>At an exchange rate of 1.05 euro per dollar the cost of a latté would be the same in the euro area as it did in the United States.</em>

<em></em>

Explanation:

The contidion is that the two prices are equal:

  • <em>exchange rate </em>× $2.8 = Euros 2.93

Solve for the <em>exchange rate</em>:

  • <em>exchange rate</em> = Euros2.93/$2.80 = Euro 1.05/$

Thus, at an<em> exchange rate</em> of 1.05 euro per dollar <em>the cost of a latté would be the same in the euro area as it did in the United States.</em>

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