If the Exchange Rate Changes from $1

question 62

Multiple Choice

If the exchange rate changes from $1.52 = £1.00 to $1.65 = £1.00,then relative to each other,

• A) both the dollar and the British pound have appreciated.
• B) both the dollar and the British pound have depreciated.
• C) the dollar has appreciated and the British pound has depreciated.
• D) the dollar has depreciated and the British pound has appreciated.

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Definitions:

Short Run

A period in economics where at least one input (e.g., capital) is fixed, focusing on immediate effects rather than long-term outcomes.

Resources

A broad term for the assets, materials, and inputs used to produce goods and services, including natural, human, and capital resources.

Variable Cost

A cost that changes in proportion to the level of activity or volume of output in a business.

Wages

Payments made to workers for their labor, usually calculated on an hourly, daily, or piecework basis.