Asked by Lindsay Stavnes on May 29, 2024
Verified
European Vacation
After staying around 1.35 US dollars per Euro for years,the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014.What affect does this have on tourism in Europe?
Exchange Rate
The price at which one currency can be exchanged for another currency in the foreign exchange market.
US Dollars
The currency issued by the United States, functioning as its primary medium of exchange and a global reserve currency.
Tourism
The activity of traveling to and staying in places outside one's usual environment for leisure, business, or other purposes.
- Assess the effects of changes in currency value on international trade and tourism.
Verified Answer
AS
Arash SinghMay 31, 2024
Final Answer :
The demand for European vacations by Americans will increase because it takes fewer dollars to convert into a given number of euros.Likewise,Europeans considering coming to the US now have to convert more euros into dollars if they wish to visit the US.Some will opt to stay in Europe instead.Both effects increase the demand for hotels in Europe during holidays.Since supply of hotels is relatively fixed,this increases the hotel rates expressed in euros.
Learning Objectives
- Assess the effects of changes in currency value on international trade and tourism.