If the exchange rate falls from 120 yen per dollar to 100 yen per dollar, the dollar has_________ and the yen has_________ .
A) appreciated; depreciated
B) depreciated; depreciated
C) depreciated; appreciated
D) appreciated; appreciated

Question

Quizplus · Accepted Answer

If the exchange rate falls from 120 yen per dollar to 100 yen per dollar, it means that the dollar can buy fewer yen. Therefore, the dollar has depreciated relative to the yen, while the yen has appreciated relative to the dollar. Therefore, the best choice is C, which states that the dollar has depreciated and the yen has appreciated.

If the Exchange Rate Falls from 120 Yen Per Dollar