5) When the exchange rate changes from 1.0 euros to the dollar to 1.2 euros to the dollar, the euro has A) appreciated; appreciated B) depreciated; appreciated C) appreciated; depreciated D) depreciated; depreciated

The exchange rate is given in terms of euros per dollar. Initially, the rate is \[ 1.0 \; \text{euros per dollar} \] which means that \[ 1 \; \text{euro} = \frac{1}{1.0} = 1 \; \text{dollar}. \] When the rate changes to \[ 1.2 \; \text{euros per dollar}, \] this implies that one dollar now costs 1.2 euros. Inverting the rate, we find the value of one euro in dollars: \[ 1 \; \text{euro} = \frac{1}{1.2} \approx 0.833 \; \text{dollars}. \] Thus, the value of the euro has fallen from 1 dollar to approximately 0.833 dollars. This decrease in the dollar value of the euro means the euro has depreciated relative to the dollar. Since both parts of the answer use the same language (appreciated or depreciated), the correct answer is: - The euro has depreciated; depreciated. Therefore, the answer is: \[ \textbf{D) depreciated; depreciated.} \]