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?
a) Not good. The Chinese would not see value in a horn because they are accustomed to just yell at each other in traffic.
b) Good because the yuan has strength against the dollar. The Chinese have 6.42 yuan to spend compared to $1 U.S. dollar.
c) It depends on the value of the Chinese yuan in relation to the dollar.
d) Pretty good because the U.S. dollar is down against the Chinese yuan.
Answer: c