Is It Possible for a Currency to Appreciate Relative to One

question 53

Multiple Choice

Is it possible for a currency to appreciate relative to one currency, and depreciate relative to another?

• A)No, a currency rises or falls against all currencies.
• B)No, this could happen only under the gold standard.
• C)Yes, but only if all governments agree on the new rates.
• D)Yes, this is possible in a world of floating rates.

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Definitions:

Installment Purchase

A method of buying goods through a series of payments over time, where the buyer gains possession of the item immediately but pays for it in periodic installments.

Authorized Shares

The maximum number of shares that a corporation is legally allowed to issue, as specified in its articles of incorporation.

Outstanding

Refers to something not yet resolved or paid; in finance, it typically relates to shares issued and still in circulation or debts that have not been settled.

Legal Capital

The portion of a company's equity that cannot legally be distributed to shareholders as dividends, usually related to the par value of common and preferred shares.