A Canadian traveling to the United States converts $100 Canadian into 95 U.S.dollars.One month later he does the same thing and receives 105 U.S.dollars.There are no transactions costs.The Canadian-U.S.exchange rate has ________ and the Canadian dollar has ________ relative to the U.S.dollar.

Question

Quizplus · Accepted Answer

The Canadian-U.S. exchange rate has fallen because the traveler receives more U.S. dollars for the same amount of Canadian dollars, indicating that the Canadian dollar has appreciated relative to the U.S. dollar.

A Canadian Traveling to the United States Converts $100 Canadian