Question: The dollar - pound exchange rate is initially $ 2 . 0 0 / 1 and moves to $ 1 . 8 0 / 1

The dollar-pound exchange rate is initially $2.00/1 and moves to $1.80/1 one year later. Over the same period the US price index rises from 100 to 120, while the UK price index moves from 100 to 110. Which of the following statements is true concerning the real exchange rate of the pound against the dollar (to one decimal place)?
Select one:
A. It will have depreciated to 82.5
B. It will have appreciated to 82.5
C. It will have depreciated to 98.2
D. It will have appreciated to 98.2

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