Question 1(Multiple Choice Worth 3 points)

(05.06 MC)

Larry, a United States citizen, is planning to take a European vacation. Most European nations use the euro as their currency. Just before his vacation, the value of the euro drops compared to the U. S. dollar. How would this change in value affect Larry's upcoming trip?

The cost of things Larry purchases while in Europe would decrease, because it would take fewer dollars to buy euros than it would have before.
The cost of Larry's trip would go up because the cost of airfare will likely increase.
The cost of things Larry purchases while in Europe will increase, because it would take more dollars to buy euros than it would have before.
Larry would likely be unaffected by changes to the value of the euro because he probably already purchased his plane ticket.

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