Questions: Question 7 of 20 A Japanese traveler in England is having trouble purchasing anything because she has only Japanese currency. In order to buy the things she wants, she has to have her Japanese yen traded in for pounds, the British currency. Which piece of information would be most helpful to the traveler in this situation? A. The availability of the yen and the pound in currency markets B. The total money supply of the yen and the pound C. The inflation rate of the yen compared to the pound D. The exchange rate between the yen and the pound

The answer is D: the exchange rate between the yen and the pound.

Explanation for each option:

A. The availability of the yen and the pound in currency markets – While this information might be useful in understanding how easily the currencies can be traded, it does not directly help the traveler know how much of one currency she will get in exchange for the other.

B. The total money supply of the yen and the pound – This information pertains to the overall amount of money in circulation for each currency, which is more relevant to economists and policymakers than to an individual traveler trying to exchange money.

C. The inflation rate of the yen compared to the pound – Although inflation rates can affect exchange rates over time, knowing the current inflation rates does not provide immediate information on how much the traveler will receive when exchanging her yen for pounds.

D. The exchange rate between the yen and the pound – This is the most directly relevant piece of information for the traveler. The exchange rate tells her how much British currency (pounds) she will receive for her Japanese currency (yen), which is essential for making purchases in England.