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Chapter 16: Q.14 (page 406)

What does it mean to say that a currency

appreciates? Depreciates? Becomes stronger? Becomes weaker?

Short Answer

Expert verified

Currency appreciation means a growth in the importance of one currency over another currency.

Step by step solution

01

Concept of Appreciation

Appreciation implies development in the significance of speculation. For exchanging rate, appreciation remains as the development in the worth of the homegrown money as far as unfamiliar monetary standards. This increment makes the domestic currency solid on the planet economy and subsequently, appreciation is likewise called fortifying.

02

Concept of Depreciation

Depreciation refers to the fall in the worth of a resource. For monetary forms, the decline in the worth of the homegrown money as far as unfamiliar monetary standards are alluded to as deterioration. The fall in the worth makes the domestic currency generally more fragile, consequently, it is otherwise called debilitating.

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