Suppose the dollar- yen foreign exchange rate changes from 140 yen per dollar to 130 yen per dollar.Then the yen has
A)appreciated against the dollar, and the dollar has depreciated against the yen.
B)appreciated against the dollar, and the dollar has appreciated against the yen.
C)depreciated against the dollar, and the dollar has appreciated against the yen.
D)neither appreciated nor depreciated, but the dollar has depreciated against the yen.
E)depreciated against the dollar, and the dollar has depreciated against the yen.

Question

Quizplus · Accepted Answer

When the dollar-yen exchange rate decreases from 140 to 130, it means that now we need fewer yen to buy one dollar. Therefore, the yen has appreciated against the dollar. At the same time, it also means that now we need more dollars to buy one yen. Thus, the dollar has depreciated against the yen.

Suppose the Dollar- Yen Foreign Exchange Rate Changes from 140