Asked by Nyiah Smith on Jul 27, 2024
Verified
If the Canadian dollar price of United States dollars increases from C$0.80 to C$1.00, it can be concluded that
A) both countries are on the international gold standard.
B) the Canadian dollar has appreciated in value relative to the United States dollar.
C) the United States dollar has depreciated in value relative to the Canadian dollar.
D) the Canadian dollar has depreciated in value relative to the United States dollar.
International Gold Standard
A monetary system in which the value of a country's currency is directly linked to gold, allowing for free conversion between the currency and gold at a fixed price.
Appreciated
Refers to an increase in value or price, particularly in the context of currency, where it indicates a rise in value relative to other currencies.
Depreciated
A reduction in the value of an asset over time, often due to wear and tear or obsolescence.
- Understand the impact of exchange rate fluctuations on national currencies' relative value.
- Understand the concepts of currency appreciation and depreciation.
Verified Answer
NM
Nijae MooreJul 27, 2024
Final Answer :
D
Explanation :
When the price of United States dollars in Canadian dollars increases, it means that it now takes more Canadian dollars to buy the same amount of United States dollars. This indicates that the Canadian dollar has depreciated in value relative to the United States dollar.
Learning Objectives
- Understand the impact of exchange rate fluctuations on national currencies' relative value.
- Understand the concepts of currency appreciation and depreciation.