If the Exchange Rate Changes from 20 Cents Per Franc

question 63

Multiple Choice

If the exchange rate changes from 20 cents per franc to 18 cents per franc, the U.S.dollar has

• A)appreciated, since its value has increased
• B)appreciated, since its value has declined
• C)depreciated, making French goods more expensive in U.S.dollars
• D)depreciated, since its value has declined
• E)depreciated, since its value has increased

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Definitions:

Clear All Markets

A theoretical situation where supply equals demand in all markets, leading to economic equilibrium.

Efficiency

The ability to accomplish a task or a set of tasks with the minimum expenditure of time and resources.

Equity

Fairness or justice in the way people are treated and decisions are made, often relating to economic policies or distribution of resources.

Capital Flows

The transfer of funds to support trade, investment, or business activities, domestically or across borders.