Under which of the following systems does appreciation and depreciation of a country's currency occur?
A) the gold standard
B) the multinational exchange standard
C) fixed exchange rates
D) flexible exchange rates
E) equation of exchange rates

Question

Quizplus · Accepted Answer

Appreciation and depreciation of a country's currency occur under a flexible exchange rate system where the exchange rate value is determined by the market forces of supply and demand. As the demand for a currency increases, its value appreciates, and if the demand decreases, its value depreciates.

Under Which of the Following Systems Does Appreciation and Depreciation