Under a flexible exchange rate system, __________ is when a currency has decreased in value relative to another currency.
A)depreciation
B)appreciation
C)capital inflow
D)revaluation

Question

Quizplus · Accepted Answer

Depreciation refers to a decline in the value of a currency relative to another currency. This can happen in a flexible exchange rate system where exchange rates are determined by market forces of supply and demand, rather than being fixed or pegged to another currency or commodity. Depreciation can occur due to various factors such as changes in economic fundamentals, political instability, or changes in global demand for goods and services.

Under a Flexible Exchange Rate System, __________ Is When a Currency