When a Country Officially Decreases the Value of Its Currency

question 61

Multiple Choice

When a country officially decreases the value of its currency relative to other currencies, it is called currency _____.

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

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Definitions:

Certificate of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate that is issued by a bank.

Principal

A primary party to a transaction, such as the chief participant in a business or the main amount of a loan.

Foreign Currency

Currency used in a country other than the one in which it is being considered, which usually requires exchange for use.

Negotiable

Capable of being transferred or sold with ease and typically refers to financial instruments subject to certain conditions.