Given that S(AUD/SGD) = 1.0000, which of the following real exchange rates for Q(AUD/SGD) would be the worst scenario for Singaporean tourists going to Australia?Group of answer choices0.80000.90001.20001.1000
Question
Given that S(AUD/SGD) = 1.0000, which of the following real exchange rates for Q(AUD/SGD) would be the worst scenario for Singaporean tourists going to Australia?Group of answer choices0.80000.90001.20001.1000
Solution
The worst scenario for Singaporean tourists going to Australia would be Q(AUD/SGD) = 1.2000. This is because they would have to spend more Singaporean dollars to get the same amount of Australian dollars. The higher the exchange rate, the more expensive it is for Singaporeans to travel to Australia.
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