The value of its currency keeping it artificially

Question

the value of its currency keeping it artificially low in order to give the country an export advantage the point is that if the yuan is valued at less than its actually worth imported goods will cost more in yuan than they should and that will make imports less attractive to Chinese buyers leading to an export advantage some economists feel that the yuan is valued at 20% less than it should be compared to the U.S dollar

If that’s accurate one dollar should be worth less yuan than the actual exchange rate. If the yuan is undervalued by 20% then one dollar should be worth 20% less yuan. Find what exchange rate should be.

for how much would that affect the price of a Volkswagen in China ($24,000)

forensic scientist often examine scaled up crime scene photos to search for evidence that might be hard to identify at regular size. Studying nite marks on a photo of a victims leg at 500% magnification a technician measured the distance between two punctures from the bite to be 165mm. What is the actual distance between punctures (Hint the ratio of the photo size is to actual size is 5/1)

Answer 1

Fun questions!

When I looked it up online, the exchange rates were:

1. 1 Chinese yuan = $0.14 US dollars
2. $1 US dollar = 7.03 Chinese yuan

Part 1 of the problem:

If that’s accurate one dollar should be worth less yuan than the actual exchange rate. If the yuan is undervalued by 20% then one dollar should be worth 20% less yuan. Find what exchange rate should be.

The simplest way to find this answer? Find 20% (which is 0.20 as a decimal) of 7.03 and subtract it from 7.03:

7.03 * 0.2 = 1.406

7.03 - 1.406 = 5.624

The real exchange should be $1 US dollar = 5.624 Chinese yuan

Part 2 of the problem:

for how much would that affect the price of a Volkswagen in China ($24,000)

For this, multiply each exchange rate by the cost in dollars of the car, and subtract to find out by how much the price has been increased:

24000 * 7.03 = 168,720 Chinese yuan

24000 * 5.624 = 134,976 Chinese yuan

168720 - 134976 = 33,744 Chinese yuan higher than it should be

Ouch!

The second problem:

forensic scientist often examine scaled up crime scene photos to search for evidence that might be hard to identify at regular size. Studying nite marks on a photo of a victims leg at 500% magnification a technician measured the distance between two punctures from the bite to be 165mm. What is the actual distance between punctures (Hint the ratio of the photo size is to actual size is 5/1)

We know from the problem that:

1. scale = 500% or 5/1
2. distance between two punctures at scale = 165 mm

The words are intimidating, but the math is not. If we blew the picture up by 5 times, then we just reduce it by 5 times to get back to reality. That's just a division:

165 / 5 = 33 mm between punctures

That is still more than an inch. Ouch again!