By definition, currency depreciation occurs when the value of
A) all currencies fall relative to gold.
B) one currency falls relative to another currency.
C) one currency rises relative to another currency.
D) gold falls relative to the value of currencies.
B
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Which of the following correctly describes the trend in the federal budget during the 1980s? a. Federal spending declined relative to GDP, while federal revenues rose relative to GDP. b. Federal spending rose relative to GDP, while federal revenues declined relative to GDP. c. Balanced budgets were passed through cooperation between the President and Congress. d. The dollar depreciated,
thereby lowering the deficit. e. The budget deficit decreased and then disappeared, turning into a surplus in the 1980s.
Suppose the CPI does indeed overstate the inflation rate. When the CPI increases by 5 percent and household incomes increase by 5 percent, we should conclude that real incomes of households have:
A. increased. B. increased more slowly than has inflation. C. stayed constant. D. decreased.