If 100 U.S. dollars traded for 150 Canadian dollars yesterday, but 150 U.S. dollars trades for 300 Canadian dollars today, which of the following is correct?(1 point)

Question

Responses

The U.S. dollar depreciated with respect to the Canadian dollar, and the Canadian dollar appreciated with respect to the U.S. dollar.
The U.S. dollar depreciated with respect to the Canadian dollar, and the Canadian dollar appreciated with respect to the U.S. dollar.

The U.S. dollar depreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.
The U.S. dollar depreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.

The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.
The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.

The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar appreciated with respect to the U.S. dollar.
The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar appreciated with respect to the U.S. dollar.

Answer 1

To analyze the situation, we need to look at the exchange rates provided:

1. Yesterday, 100 U.S. dollars (USD) traded for 150 Canadian dollars (CAD). This implies the exchange rate was: \[ \text{Exchange Rate (USD to CAD)} = \frac{150 \text{ CAD}}{100 \text{ USD}} = 1.5 \text{ CAD/USD} \]

2. Today, 150 U.S. dollars traded for 300 Canadian dollars. This gives us the new exchange rate: \[ \text{Exchange Rate (USD to CAD)} = \frac{300 \text{ CAD}}{150 \text{ USD}} = 2 \text{ CAD/USD} \]

Now, let's determine what has happened to the U.S. dollar with respect to the Canadian dollar:

• Yesterday's rate was 1.5 CAD per 1 USD, and today it is 2 CAD per 1 USD.
• Since it now takes more Canadian dollars to buy 1 U.S. dollar (2 CAD compared to 1.5 CAD), the U.S. dollar has appreciated relative to the Canadian dollar.
• Conversely, this means the Canadian dollar has depreciated against the U.S. dollar, as it is now weaker in terms of USD.

Given this analysis, the correct response is:

The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.