Give an example of currency depreciation and appreciation
What will be an ideal response?
A currency depreciates when it becomes less valuable in the foreign exchange market. For instance, if the exchange rate changes from 130 yen per dollar to 110 yen per dollar, the dollar has depreciated. A currency appreciation is the exact opposite: A currency appreciates when it becomes less valuable in the foreign exchange market. For instance, if the exchange rate changes from 130 yen per dollar to 150 yen per dollar, the dollar has appreciated.
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The O in OLI theory stands for ownership, and the asset owned can be tangible or intangible
Indicate whether the statement is true or false
When more than one central bank attempts to shift the equilibrium exchange rate, we refer to this as:
a. sterilization. b. a currency crisis. c. coordinated intervention. d. an application of special drawing rights. e. a floating exchange rate system.
When economists are trying to help improve the world, they are
a. in the realm of positive economics rather than normative economics. b. in the realm of macroeconomics rather than microeconomics. c. scientists. d. policy advisers.
A decrease in government spending initially and primarily shifts
a. aggregate demand to the right. b. aggregate demand to the left. c. aggregate supply to the right. d. neither aggregate demand nor aggregate supply.