Question

If 100 euros could buy $1.00 U.S. dollar in 2008 and $0.93 U.S. dollars in 2012, then:

O the dollar depreciated against the euro.
O the euro appreciated against the dollar.
O the dollar strengthened against the euro.
O the euro strengthened against the dollar.

Answer 1

Between 2008 and 2012, the U.S. dollar depreciated against the euro, and the euro appreciated against the U.S. dollar, affecting international trade and competitive pricing.

Step-by-step explanation:

If in 2008, 100 euros could buy $1.00 U.S. dollar and in 2012 it could buy only $0.93 U.S. dollars, this indicates that the U.S. dollar depreciated against the euro. Conversely, it also implies that the euro appreciated against the U.S. dollar during that time.

This can be understood in the context of international trade, where a stronger currency makes exports less competitive abroad, while a weaker currency can encourage exports. For example, a French firm with costs in euros and revenues in dollars will suffer losses when the euro strengthens against the dollar, as it did from 1999 to 2013.