Question

When studying abroad last year, Blake found that his U.S. dollars did not stretch as far as he had hoped. Each time he exchanged U.S. dollars for euros, he gave up more U.S. dollars in exchange for less euros. The exchange rate indicates: A. the dollar has gained strength against the euro.B. the euro is weak against the U.S. dollar.C.the euro has gained strength against the dollar.D. the demand for dollars is stronger than the demand for euros.

Answer 1

Answer:

C. the euro has gained strength against the dollar.

Explanation:

If Blake gives up more U.S. dollars in exchange for less euros every time, this means that the exchange rate is increasing. The exchange rate is the price of a currency in exchange for another. So, if the price is increasing that means that euro is getting stronger than dollars,  which is contrary to affirmation A and B, but is affirmation C. This could be because the demand for euro is stronger than the demand for dollars, which is contrary to affirmation D.