When fewer units of a foreign currency are required to buy one dollar, the currency is said to have ________.
A) appreciated with respect to the dollar
B) depreciated with respect to the dollar
C) appreciated with respect to the home currency
D) appreciated with respect to the average rate of the home currency

Question

Quizplus · Accepted Answer

Appreciation refers to an increase in the value of a currency relative to another currency. When fewer units of a foreign currency are needed to buy one dollar, this means that the foreign currency has increased in value relative to the dollar, and thus has appreciated with respect to the dollar.

When Fewer Units of a Foreign Currency Are Required to Buy