If the dollar price of the English pound goes from $1.50 to $1.75, the dollar has
A) appreciated, and Americans will find English goods cheaper.
B) appreciated, and Americans will find English goods more expensive.
C) depreciated, and Americans will find English goods cheaper.
D) depreciated, and Americans will find English goods more expensive.

Question

Quizplus · Accepted Answer

When the dollar price of the English pound goes from $1.50 to $1.75, it means that the value of the dollar has decreased in relation to the pound. This is a depreciation of the dollar. As a result, for Americans, English goods will become more expensive as they will require more dollars to purchase the same amount of pounds.

If the Dollar Price of the English Pound Goes from $1.50