Question

The dollar is said to appreciate against the euro if the exchange rate ________?

1) increases
2) decreases
3) remains the same
4) fluctuates

Answer 1

The currency appreciates when the exchange rate increases or becomes stronger. For example, if the exchange rate between the dollar and the euro increases, the dollar has appreciated against the euro.

Step-by-step explanation:

When the exchange rate of a currency increases or becomes stronger, it is said to appreciate. For example, if the exchange rate between the dollar and the euro increases from 1 dollar equals 0.85 euros to 1 dollar equals 0.90 euros, the dollar has appreciated against the euro.