Exhibit 21-7 Foreign exchange market for U.S. dollars and British pounds Exhibit 21-7 shows a situation in which:

Question

Exhibit 21-7  Foreign exchange market for U.S. dollars and British pounds  Exhibit 21-7 shows a situation in which:

Quizplus · Accepted Answer

The exchange rate for British pounds in terms of U.S. dollars has increased from $1.60 per pound to $1.80 per pound, indicating that the pound has appreciated. At the same time, the exchange rate for U.S. dollars in terms of British pounds has decreased from 0.625 pounds per dollar to 0.555 pounds per dollar, indicating that the dollar has depreciated. Therefore, the correct choice is C: the dollar has depreciated and the pound has appreciated.

Exhibit 21-7 Foreign Exchange Market for U