Asksia AI LOGO

Sia

Question
Microeconomics
Posted 2 months ago

The exchange rate of the Schrute buck (SB)(S B) to the Stanley nickel (SN)(S N) between 2016 and 2017 is given in the table below.
\begin{tabular}{lll} 
Year & SBS B needed to buy 1SN1 S N & SN needed to buy 1SB1 S B \\
\hline 2016 & 5 & 0.2 \\
2017 & 4 & 0.25
\end{tabular}

What can we definitely say happened between 2016 and 2017 ?
Choose 1 answer:
(A) The SBS B can buy fewer goods domestically
(B) The real interest rate in the country that uses the SBS B decreased
(C) The SBS B depreciated
(D) The SBS B appreciated
(E) The SBS B can buy more goods domestically
Sign in to unlock the answer
Answer from Sia
Posted 2 months ago
Solution
a
Exchange Rate Change: In 2016, 5 SBS B were needed to buy 1 SNS N, and in 2017, only 4 SBS B were needed to buy 1 SNS N. This indicates that the SBS B has become stronger relative to the SNS N
b
Depreciation/Appreciation: Since fewer SBS B are needed to buy 1 SNS N in 2017 compared to 2016, the SBS B has appreciated
Answer
(D) The SBS B appreciated
Key Concept
Currency Appreciation
Explanation
When fewer units of a currency are needed to purchase one unit of another currency, it indicates that the first currency has appreciated. In this case, the SBS B appreciated from 2016 to 2017.

Not the question you are looking for? Ask here!

Enter question by text

Enter question by image

Upgrade to Asksia Pro

Join a AskSia's Pro Plan, and get 24/7 AI tutoring for your reviews, assignments, quizzes and exam preps.

Unlimited chat query usages
Strong algorithms that better know you
Early access to new release features
Study Other Question