What are the differences and similarities between a depreciation and devaluation of a currency?
What will be an ideal response?
A depreciation of a currency takes place due to the mechanics of supply and demand and belongs to a flexible or floating exchange rate system. On the other hand, devaluation is due to the intervention by the monetary authority of a central bank of a country following a fixed exchange rate system. They both result in a lower value of the currency.
Economics
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a. True b. False Indicate whether the statement is true or false
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a. True b. False Indicate whether the statement is true or false
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