ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Appreciation
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Inflation
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Depreciation
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Deflation
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Detailed explanation-1: -Currency depreciation is a fall in the value of a currency in terms of its exchange rate versus other currencies. Currency depreciation can occur due to factors such as economic fundamentals, interest rate differentials, political instability, or risk aversion among investors.
Detailed explanation-2: -External devaluation. By devaluing its currency against another, it can increase exports because its goods and services will cost less in the international market. This type of devaluation is a common mechanism to revive the economy.
Detailed explanation-3: -Currency depreciation is the decrease in the value of one currency relative to another. For example, if the EUR-USD exchange rate moves from 1.15 to 1.00, it means that the euro has depreciated by 13% against the U.S. dollar.
Detailed explanation-4: -Lower export revenues. A surge in imports. Reduced monetary policy interest rates. Central bank intervention. Traders and speculators selling currencies on the market.