Question

When the dollar "falls" compared to other currencies, this means A) it takes more dollars to equal a unit of foreign currency. B) it takes fewer dollars to equal a unit of foreign currency. C) the value of a unit of foreign currency is harder to measure in dollars. D) the value of a dollar is harder to measure, compared to foreign currencies.

Answer 1

A) it takes more dollars to equal a unit of foreign currency.

Step-by-step explanation:

When a dollar falls , it means that the value of the dollar has decreased relative to a certain foreign currency. For example, if the USD/CAD exchange rate was 1.219 in Jan,2014, it means that the CAD is the foreign currency and it will cost you USD1.219 to buy 1CAD currency.

If in Jun, 2014, the USD/CAD falls to 1.350, it means that the value of the USD has decreased and CAD has increased hence you will pay more USD to buy the foreign currency. The vice, versa is also true.