If the British pound appreciates from $0.50 per pound to $0.75 per pound,the U.S. dollar depreciates from ________ per dollar to ________ per dollar.

Question

Quizplus · Accepted Answer

If the British pound appreciates from $0.50 per pound to $0.75 per pound, it means that the pound has become stronger and can buy more U.S. dollars. Therefore, the U.S. dollar has to weaken in order to maintain the exchange rate. We can calculate the new exchange rate as follows:

1 pound / $0.75 = 1.33 dollars per pound

So, the U.S. dollar has depreciated from £2 per dollar to £1.33 per dollar. The correct answer is B.

If the British Pound Appreciates from $0