The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates.

-If,because of some change in supply or demand,the exchange rate rises from $0.11 to $0.15 to the peso
A) the peso has been devalued.
B) the dollar has been devalued.
C) the dollar has appreciated relative to the peso.
D) the peso has appreciated relative to the dollar.
E) both currencies have depreciated relative to each other.

Question

The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates.
 
-If,because of some change in supply or demand,the exchange rate rises from $0.11 to $0.15 to the peso
A) the peso has been devalued. 
B) the dollar has been devalued. 
C) the dollar has appreciated relative to the peso. 
D) the peso has appreciated relative to the dollar. 
E) both currencies have depreciated relative to each other.

Quizplus · Accepted Answer

The peso has appreciated relative to the dollar because it now takes more dollars to buy one peso.

The Following Question Are Based on the Following Graph, Showing