Suppose the Government of South Island Fixes the Exchange Rate

Multiple Choice

Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. Later the government changes the exchange rate to $2 per Islandia. This is an example of a(n) :

A) appreciation.
B) depreciation.
C) devaluation.
D) revaluation.