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 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.

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

Answer 1

To analyze the situation, let's look at the exchange rates provided step by step.

1. Yesterday's exchange rate:

   • 100 U.S. dollars = 150 Canadian dollars (CAD).
   • Therefore, the exchange rate yesterday is \( 1 \text{ USD} = \frac{150 \text{ CAD}}{100 \text{ USD}} = 1.5 \text{ CAD/USD} \).

2. Today's exchange rate:

   • 150 U.S. dollars = 300 Canadian dollars.
   • Therefore, the exchange rate today is \( 1 \text{ USD} = \frac{300 \text{ CAD}}{150 \text{ USD}} = 2 \text{ CAD/USD} \).

Now we can analyze what has happened:

• Exchange rate change: Yesterday it took 1.5 CAD to buy 1 USD, and today it takes 2 CAD to buy 1 USD. This means that the U.S. dollar is now worth more Canadian dollars than it was yesterday.

• Thus, the U.S. dollar has appreciated with respect to the Canadian dollar (it takes more Canadian dollars to get one U.S. dollar).

• Canadian dollar's perspective: If the U.S. dollar appreciates, it means the Canadian dollar has depreciated against the U.S. dollar, as you need more CAD to buy the same amount of USD.

Therefore, the correct conclusion is:

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