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 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 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.

Answer 1

To determine the changes in the values of the U.S. dollar (USD) relative to the Canadian dollar (CAD), let's analyze the exchange rates given in the statements:

1. Initially, 100 USD traded for 150 CAD. This means the exchange rate was: \[ \text{Exchange rate (yesterday)} = \frac{150 \text{ CAD}}{100 \text{ USD}} = 1.5 \text{ CAD/USD} \]

2. Today, 150 USD trades for 300 CAD. This means the exchange rate is: \[ \text{Exchange rate (today)} = \frac{300 \text{ CAD}}{150 \text{ USD}} = 2 \text{ CAD/USD} \]

Now let's analyze what happened to the U.S. dollar over this time frame:

• Yesterday: 1 USD = 1.5 CAD
• Today: 1 USD = 2 CAD

If it now takes more CAD to buy one USD (1 USD is worth more CAD today than it was yesterday), then the U.S. dollar has appreciated relative to the Canadian dollar.

Next, we can interpret the implications for the Canadian dollar in relation to the U.S. dollar: Since the U.S. dollar appreciated, this means that the Canadian dollar has depreciated with respect to the U.S. dollar (it is worth less CAD to buy 1 USD now compared to yesterday).

Thus, the correct statement from the options provided is: The U.S. dollar appreciated with respect to the Canadian dollar, and the Canadian dollar depreciated with respect to the U.S. dollar.