If the trade-weighted dollar moves from an index value to 100 to 110,the dollar depreciates by 10 percent against the trade-weighted averages of the exchange rates of the major trading partners of the United States.

Question

Quizplus · Accepted Answer

The dollar actually appreciates by 10 percent, not depreciates, because a higher index value means that the dollar is worth more relative to the weighted average of other currencies.

If the Trade-Weighted Dollar Moves from an Index Value to 100