Which of the following examples definitely illustrates an appreciation of the U.S. dollar?
A) The dollar exchanges for 100 yen and then exchanges for 125 euros.
B) The dollar exchanges for 1 pound and then exchanges for 1.2 pounds.
C) The dollar exchanges for 120 euros and then exchanges for 100 euros.
D) none of the above

Question

Quizplus · Accepted Answer

In option B, the dollar is able to exchange for more pounds, indicating that the pound is weaker and the dollar is stronger. This illustrates an appreciation of the U.S. dollar. In options A and C, the exchange rates do not provide definitive information about the relative strength of the dollar since they involve multiple currencies. Option D indicates that none of the options illustrate an appreciation of the U.S. dollar.

Which of the Following Examples Definitely Illustrates an Appreciation of the U.S