Because of the high volume of bicycles as a common form of transportation in beijing and shanghai, charles wants to sell his bicycle horns to these markets. in this case, the exchange rate is $1 u.s. dollar = 6.42 chinese yuan. economically speaking, how are his prospects?

This is not a good investment and Charles should hold his plan of selling his bicycle Beijing and in China. For example, if Charles sold his bicycle horn for $3.00, this would need a 6.42*3 which is equal to 19.26 Chinese yuan.

Charles's prospects of economically speaking are that it depends on the value of the Chinese yuan with respect to the U.S. dollar.  

Further Explanation:

Exchange rate:

The exchange rate is the rate in which two currencies are exchanged between each other. The exchange rate is decided by the government. The exchange rate is used in case of import the goods and the export of the goods. The exchange rate depends on the value of the currency if the one currency value is high as compared to the other currency value. The exchange rate is determined according to these values of currency.  

Chinese Yuan is the currency of China and the U.S. dollar is the currency of the United States of America. The exchange rate between these two countries is 1 U.S. dollar is equal to 6.42 Chinese Yuan. The Chinese receive 6.42 Chinese yuan in exchange for 1 U.S. dollar.  

As the bicycle is the common form of transportation in China. If Charles sells this bicycle, he is not able to travel from one place to another. The demand for the bicycle is more in china, Charles should not sell the bicycle.  

Learn more:

1.Learn more about the demand curve

2.Learn more about the exchange

3.Learn more about economic pie

Answer details:

Grade: Middle School

Subject: Economics

Chapter: Exchange rate

Keywords:

because of, high volume, bicycles, a common form of transportation, in Beijing and Shanghai, horns, market, $1 U.S. dollar = 6.42 Chinese yuan, value, prospects, exchange rate, Charles, import, export, currency.  

Explanation:

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