When the Australian dollar depreciates relative to the euro, the euro price of the Australian dollar:
A) decreases.
B) changes in the next period.
C) does not change.
D) increases.
E) increases or decreases, depending on the amount of the depreciation.

Question

Quizplus · Accepted Answer

When the Australian dollar depreciates relative to the euro, it means that it takes more Australian dollars to equal one euro. Therefore, the euro price of the Australian dollar decreases.

When the Australian Dollar Depreciates Relative to the Euro, the Euro