If the U.K. pound sterling appreciates relative to the New Zealand dollar, which of the following correctly explains the change in relationship between the two currencies?(1 point)

Question

Responses

The U.K.'s pound will become worth more compared to the New Zealand dollar.
The U.K.'s pound will become worth more compared to the New Zealand dollar.

The U.K.'s pound will become worthless compared to the New Zealand dollar.
The U.K.'s pound will become worthless compared to the New Zealand dollar.

The U.K.'s pound will maintain the same exchange rate to the New Zealand dollar.
The U.K.'s pound will maintain the same exchange rate to the New Zealand dollar.

The U.K.'s pound will become worth less compared to the New Zealand dollar.

Answer 1

The correct response is:

The U.K.'s pound will become worth more compared to the New Zealand dollar.

When the U.K. pound sterling appreciates relative to the New Zealand dollar, it means that it takes fewer pounds to buy the same amount of New Zealand dollars, or conversely, the pound now has more purchasing power in terms of New Zealand currency.