In June 2008, $1 bought 0.5 pounds and in October, $1 bought 0.65 pounds. As a result of this change, ________ between June and October.
A) the demand for dollars increased
B) the dollar appreciated and the quantity of dollars demanded decreased
C) the dollar depreciated and the quantity of dollars demanded decreased
D) the demand for dollars decreased

Question

Quizplus · Accepted Answer

The dollar appreciated because it could buy more pounds in October (0.65 pounds) than it could in June (0.5 pounds). This appreciation typically leads to a decrease in the quantity of dollars demanded, as it becomes more expensive for holders of other currencies to purchase dollars.

In June 2008, $1 Bought 0