Question

The following table shows the number of U.S. dollars required to buy one British pound and the number of U.S. dollars required to buy one euro between February 1, 2016, and September 1, 2016 Date February 1, 2016 March 1, 2016 April 1, 2016 May 1, 2016 June 1, 2016 July 1, 2016 August 1, 2016 September 1, 2016 1.314 Between February 1, 2016, and March 1, 2016, the U.S. dollar and the U.S. dollar U.S. Dollars Required to Buy 1 British Pound 1.429 1.425 1.432 1.452 1.420 1.313 1.310 U.S. Dollars Required to Buy 1 Euro 1.1092 1.1134 1.1346 1.1312 1.1232 1.1055 1.1207 1.1218 against the British pound, ____ against the euro. O appreciated: depreciated O neither appreciated nor depreciated; neither appreciated nor depreciated O appreciated; appreciated O depreciated; appreciated O depreciated; depreciated

Answer 1

For this we have to define both the depreciation and the appreciation. The depreciation is the increase in the domestic price of foreign currency and the appreciation is the decline in the domestic price of the foreign currency.

Between February 1 2016 and March 1 2016, there is less amount of U.S dollar required to purchase 1 British pound. In January it was $1.429 and then in the march it has declined to $1. 425 so there is a decline in the domestic price of the foreign currency that is the U.S dollar has appreciated against the British pound.

And for the Euro the U.S dollar has depreciated, it requires more amount U,S dollar to purchase 1 Euro in March 2016.

Ans: appreciated:depreciated.