Which of the following statements is true?
A)Conceptually, an FX rate will appreciate in value relative to other currencies when demand is low.
B)Conceptually, an FX rate will appreciate in value relative to other currencies when supply is high.
C)Conceptually, an FX rate will depreciate in value relative to other currencies when demand is low.
D)Conceptually, an FX rate will appreciate in value relative to other currencies when supply is low.

Question

Quizplus · Accepted Answer

When the demand for a currency decreases, its value in relation to other currencies decreases, meaning it will depreciate. Conversely, when the demand for a currency increases, its value in relation to other currencies increases, meaning it will appreciate. Therefore, statement C is true.

Which of the Following Statements Is True