Question10 Xinyi has seen the value of the Euro change from $1.014 to $1.038 against the US Dollar in the last three months. In this case, the US Dollar has ___________________ and the Euro has ___________________. appreciated; appreciated appreciated; depreciated depreciated; appreciated cannot determine without further information about other currency pairs depreciated; depreciated ResetMaximum marks: 1 Flag question undefined

Question

BlackTom AI · Accepted Answer

To analyze which currency appreciated or depreciated, we look at how the price of the Euro in US dollars changed over the period. The Euro moved from $1.014 to $1.038 per Euro, meaning it now costs more US dollars to buy one Euro than before.

Option 1: 'appreciated; appreciated' asserts that both the US Dollar and the Euro strengthened, which can't be true simultaneously when one currency’s price in dollars rises. If the Euro strengthens (appreciates) relative to the USD, the USD itself does not appreciate; it would weaken (depreciate) by comparison. Therefore this option is incorrect.

Option 2: 'appreciated; depreciated' would imply the USD strengthened while the Euro strengthened as well, a contradiction given the observed price movement where the Euro costs more dollars, indicating USD weakness. This makes the option incorrect.

Option 3: 'depreciated; appreciated' matches the basic intuition: as more dollars are needed to buy one Euro, the USD has depreciated relative to the Euro, and the Euro has appreciated relative to the USD. This aligns with the observed change from $1.014 to $1.038 per Euro.

Option 4: 'cannot determine without further information about other currency pairs' is unnecessary here, since the direct USD per Euro price change already tells us the relative movement between USD and Euro, independent of cross-rates.

Option 5: 'depreciated; depreciated' would imply both currencies weakened against each other, which is inconsistent with the fact that the price of the Euro in USD rose, indicating Euro strength relative to USD.

In summary, the only option that correctly captures the directional move between the two currencies is that the US Dollar depreciated and the Euro appreciated. The given correct choice is the third option: 'depreciated; appreciated'.

View Explanation

Log in for full answers

Similar Questions

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler