In the 1970s and 1980s the U.S.dollar depreciated against the German mark and appreciated against the Italian lira because the United States experienced more inflation than Germany but less inflation than Italy.

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Quizplus · Accepted Answer

This is because inflation erodes the value of a currency, causing it to depreciate. Therefore, if a country experiences higher inflation than another, its currency will depreciate in relation to the other country's currency. In the 1970s and 1980s, the United States had higher inflation than Germany but lower inflation than Italy, which led to the depreciation of the U.S. dollar against the German mark and the appreciation of the U.S. dollar against the Italian lira.