An Increase in the Value of a Domestic Currency in Terms

question 179

Multiple Choice

An increase in the value of a domestic currency in terms of other currencies is known as

• A) an appreciation.
• B) a depreciation.
• C) a flexible exchange rate.
• D) a discount rate.

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Definitions:

Real Wealth

The value of an individual's or entity's assets and resources, adjusted for inflation, reflecting the actual purchasing power over goods and services.

Aggregate Demand

The total demand for all goods and services within an economy at given price levels and in a given time period.

Short Run

A period during which at least one of a firm's inputs is fixed, only allowing the firm to vary some inputs while others remain unchanged.

Long Run

In economics, a period of time during which all factors of production and costs are variable, allowing full adjustment to any change in the market.