If the exchange rate changes from $0.08 = 1 mexican peso to $0.09 = 1 mexican peso,then
A)both the peso and dollar have appreciated.
B)both the peso and dollar have depreciated.
C)the peso has appreciated and the dollar has depreciated.
D)the peso has depreciated and the dollar has appreciated.

Question

Quizplus · Accepted Answer

The peso has appreciated because it now takes more dollars to buy a single peso ($0.09 instead of $0.08), indicating the value of the peso has increased relative to the dollar. Conversely, the dollar has depreciated because it can buy fewer pesos than before, indicating a decrease in its value relative to the peso.

If the Exchange Rate Changes from $0