The exchange rate of the Schrute buck $(S B)$ to the Stanley nickel $(S N)$ between 2016 and 2017 is given in the table below.
\begin{tabular}{lll}
Year & SB needed to buy $1 S N$ & SN needed to buy $1 S B$ \
\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 $S B$ can buy fewer goods domestically
(B) The $S B$ appreciated
(c) The real interest rate in the country that uses the $S B$ decreased
(D) The $S B$ can buy more goods domestically
(E) The $S B$ depreciated

Question

The exchange rate of the Schrute buck $(S B)$ to the Stanley nickel $(S N)$ between 2016 and 2017 is given in the table below.
\begin{tabular}{lll} 
Year & SB needed to buy $1 S N$ & SN needed to buy $1 S B$ \
\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 $S B$ can buy fewer goods domestically
(B) The $S B$ appreciated
(c) The real interest rate in the country that uses the $S B$ decreased
(D) The $S B$ can buy more goods domestically
(E) The $S B$ depreciated

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ Analyze the exchange rate from SB to SN: In 2016, it took 5 SB to buy 1 SN, and in 2017, it took 4 SB to buy 1 SN. This indicates that fewer SB are needed to buy the same amount of SN. ‖ ‖ step 2 ⋮ Analyze the exchange rate from SN to SB: In 2016, it took 0.2 SN to buy 1 SB, and in 2017, it took 0.25 SN to buy 1 SB. This indicates that more SN are needed to buy the same amount of SB. ‖ ‖ step 3 ⋮ Conclude the change in value: Since fewer SB are needed to buy SN and more SN are needed to buy SB, the value of SB has increased relative to SN. This is known as appreciation. ‖ ∻Answer∻ ***B*** ∻Key Concept∻ ⚹Currency Appreciation⚹ ∻Explanation∻ ⚹When fewer units of a currency are needed to buy a unit of another currency, the first currency has appreciated in value relative to the second.◊What formula could be used to calculate the percentage change in the exchange rate of the Schrute buck from 2016 to 2017?⍭ Generate me a similar question◊⚹

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