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If the Exchange Rate of the Pound Sterling to the U.S

Question 3

Multiple Choice

If the exchange rate of the pound sterling to the U.S. dollar is £2 to $1, but then the exchange rate moves to £3 to $1, what has transpired?


A) Pound sterling has depreciated by 50% relative to the U.S. dollar
B) Pound sterling has appreciated by 50% relative to the U.S. dollar
C) Less U.S. dollars can be purchased by using the same amount of pound sterling
D) U.S. dollar has appreciated by 50% relative to the pound sterling

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