Assume, the exchange rate between the US dollar and the Euro right now is $1/€1. Which of the following is correct about the US dollar with respect to Euro if the next year the exchange rate becomes $1.1/€1.
A) US dollar appreciated
B) US dollar depreciated
C) US dollar neither appreciated, nor depreciated
D) US dollar both appreciated and depreciated

Question

Quizplus · Accepted Answer

The US dollar depreciated because it now takes more dollars ($1.1) to buy one Euro compared to the previous rate ($1).

Assume, the Exchange Rate Between the US Dollar and the Euro