Q. Consider the following statements, Which of the following best describes a depreciated currency?

[A] It takes more of another currency to buy that currency

[B] The depreciated currency can buy fewer domestic goods and services

[C] The depreciated currency can buy more domestic goods and services

[D] It takes less of another currency to buy that currency

Answer: D
Notes:

Lets call our currency that is depreciating as X, Depreciation means that a currency has become less valuable relative to another currency. Less valuable means that its price, in terms of another currency, has gone down.

If it takes more of another currency to buy currency X that means X has appreciated and  not depreciated.

Statement b and c are related to inflation and deflation ,not depreciation.

Inflation decreases the domestic purchasing power of an individual unit of a currency. Depreciation is when a currency becomes less valuable relative to another currency.

Deflation increases the domestic purchasing power of an individual unit of a currency.

Source- Article

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