Which One of These Statements Is Correct Assuming Exchange Rates

Which one of these statements is correct assuming exchange rates are quoted as units of foreign currency per dollar?

A) When the dollar strengthens,it takes more dollars to obtain one unit of a foreign currency.
B) If the U.S.inflation rate is lower than the inflation rate in Canada,then the U.S.dollar will depreciate relative to the Canadian dollar.
C) When a foreign currency appreciates in value it strengthens relative to the dollar.
D) As the U.S.dollar strengthens,one British pound will purchase more U.S.dollars.
E) The exchange rate is unaffected by differences in the inflation rates of the two countries.

Correct Answer:

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