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

Question

Quizplus · Accepted Answer

When the dollar depreciates relative to the pound, it means that more dollars are needed to buy a single pound. Consequently, the value of the dollar in terms of pounds decreases, making the correct answer that the pound price of the dollar decreases.

When the Dollar Depreciates Relative to the Pound,the Pound Price