If the exchange rate changes from 40 Thai baht per dollar to 35 Thai baht per dollar, what has happened to the dollar?
A)It has appreciated and so buys more Thai goods.
B)It has appreciated and so buys fewer Thai goods.
C)It has depreciated and so buys more Thai goods.
D)It has depreciated and so buys fewer Thai goods.

Question

Quizplus · Accepted Answer

A decrease in the exchange rate (from 40 Thai baht per dollar to 35 Thai baht per dollar) means that the dollar has depreciated. This means that it now buys fewer Thai goods than it did previously.

If the Exchange Rate Changes from 40 Thai Baht Per