If the exchange rate changes from $2.00 = £1 to $2.01 = £1 then
A)the dollar has depreciated.
B)the dollar has appreciated.
C)the British pound has depreciated.
D)the British pound has stayed constant in value.

Question

Quizplus · Accepted Answer

When the exchange rate changes from $2.00 = £1 to $2.01 = £1, it means that now it takes more dollars to buy the same amount of pounds. This indicates that the value of the dollar has decreased relative to the pound, which is a depreciation of the dollar.

If the Exchange Rate Changes from $2