Peso depreciation reduces the dollar price of Argentine goods

Steps:

• Initial US price of $50 at 5 pesos/$ means the product costs 50 × 5 = 250 pesos in Argentina.
• Price remains 250 pesos after exchange rate change.
• New rate is 10 pesos per $1, so 1 dollar buys twice as many pesos.
• New US price is 250 pesos ÷ 10 pesos/$=$25.

Why B is correct:

• Exchange rate formula: US price = Argentine price in pesos ÷ (pesos per dollar), yielding $25 with unchanged local price.

Why the others are wrong:

• A: Divides initial $50 by 10, ignoring peso price calculation.
• C: Multiplies $50 by 2, mistaking peso depreciation for appreciation.
• D: Multiplies $50 by 10, confusing rate change direction.

Final answer: B