Question

If $1.00 U.S. dollar bought $1.50 New Zealand dollars in 2005 and it bought $1.80 New Zealand dollars in 2015, then:

O the New Zealand dollar appreciated against the U.S. dollar
O the New Zealand dollar weakened against the U.S. dollar.
O the U.S. dollar strengthened against the New Zealand dollar.
O the US dollar appreciated against the New Zealand dollar.

Answer 1

The U.S. dollar appreciated against the New Zealand dollar from 2005 to 2015, as evidenced by the increase in New Zealand dollars one could buy with a single U.S. dollar during that period.

Step-by-step explanation:

When comparing the exchange rate movements between the U.S. dollar and the New Zealand dollar, it is evident that in 2005, $1.00 U.S. dollar could purchase $1.50 New Zealand dollars whereas, by 2015, the same U.S. dollar could purchase $1.80 New Zealand dollars.

This increase in the amount of New Zealand dollars that can be bought with one U.S. dollar indicates that the U.S. dollar appreciated against the New Zealand dollar. To understand this dynamic, one can observe similar trends in exchange rate fluctuations. For example, the U.S. dollar experienced periods of both appreciation and depreciation against the Canadian dollar since 1980. At one point, it strengthened to $1.60 Canadian by 2002 from $1.17 Canadian in 1980 and fluctuated over the subsequent years.