According to the Terminology Associated with Changes in Currency Values

question 4

Multiple Choice

According to the terminology associated with changes in currency values, which of the following choices is the case when a currency's value relative to other currencies is changed by a government?

• A) depreciation and revaluation
• B) devaluation and appreciation
• C) devaluation and revaluation
• D) depreciation and appreciation

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Definitions:

MPS

Marginal Propensity to Save, which measures the fraction of additional income that is saved rather than spent on consumption.

Saving

The act of setting aside a portion of current income for future use, either by holding it as cash or putting it into investment accounts.

Disposable Income

Financial allotment for households' saving and spending requirements after income tax subtractions.

MPC

Marginal Propensity to Consume refers to the fraction of any additional income that is used for consumption purposes.