From 1980 to 2000,the yen-dollar exchange rate fell from 240 yen/dollar to 102 yen/dollar,while the dollar-pound exchange rate fell from 2.22 dollars/pound to 1.62 dollars/pound.As a result
A)the dollar appreciated relative to the yen, but depreciated relative to the pound.
B)the dollar depreciated relative to the yen, but appreciated relative to the pound.
C)the dollar appreciated relative to both the yen and the pound.
D)the dollar depreciated relative to both the yen and the pound.

Question

Quizplus · Accepted Answer

A decrease in the yen-dollar exchange rate means that it takes fewer yen to buy one dollar, indicating an appreciation of the dollar relative to the yen. On the other hand, a decrease in the dollar-pound exchange rate means that it takes more dollars to buy one pound, indicating a depreciation of the dollar relative to the pound. Therefore, the correct answer is B - the dollar depreciated relative to the yen, but appreciated relative to the pound.

From 1980 to 2000,the Yen-Dollar Exchange Rate Fell from 240