Question : When a country's currency depreciates, it means that:
Option 1: Its value decreases relative to other currencies.
Option 2: Its value increases relative to other currencies.
Option 3: Its value remains constant.
Option 4: None of the above.
Correct Answer: Its value decreases relative to other currencies.
Solution : The correct answer is a) Its value decreases relative to other currencies.
When a country's currency depreciates, it means that its value has decreased in relation to other currencies. This means that it takes more units of the domestic currency to buy a unit of another currency. In other words, the domestic currency has become weaker compared to other currencies.
Question : When a country's currency appreciates, it means that:
Question : When a country's currency is undervalued, it means that:
Question : The currency of one country is said to appreciate when its value ________ in relation to another currency.
Question : What is the term used to describe a situation where a country's currency is not freely tradable or convertible into other currencies?
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