If the Number of Units of a Foreign Currency That

question 2

Multiple Choice

If the number of units of a foreign currency that can be obtained for one dollar (the price of a dollar in that currency or indirect quotation) rises, the dollar is said to ________ relative to the currency, and the currency is said to ________. Thus, appreciation means a decline in the ________ quotation.

• A) appreciate; depreciate; direct
• B) depreciate; appreciate; indirect.
• C) appreciate; depreciate; direct,
• D) depreciate; appreciate; indirect.,

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Definitions:

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, typically used to assess inflation.

Inflation Rate

The growth rate in the common price range for goods and services, downgrading the practical purchasing scope.

Money Supply

The aggregate financial assets at a specific time in an economy.

Price Rise

An increase in the cost of goods or services, often reflecting factors like inflation, increased production costs, or higher demand.