When the Exchange Rate Between the U

question 19

Multiple Choice

When the exchange rate between the U.S.dollar and the euro changes from 1.00 euro per dollar to 1.30 euros per dollar, then the

• A) euro has appreciated against the dollar.
• B) U.S.dollar has depreciated against the euro.
• C) U.S.dollar has appreciated against the euro.
• D) euro has depreciated against the euro.
• E) U.S.dollar has depreciated against the dollar.

---

Definitions:

Subsidies

Financial support provided by governments to individuals, businesses, or institutions to promote certain activities deemed beneficial.

Higher-Valued Uses

The allocation of resources or goods to their most profitable or beneficial applications, typically where they contribute the most to welfare or profitability.

Lower-Valued Uses

Activities or allocations of resources that do not maximize potential value or returns compared to other uses.

Economic Reasoning

The process of analyzing situations, formulating models, and making decisions based on rational considerations of the costs and benefits involved.