What does it mean when someone says that the U.S. dollar has depreciated or the U.S. dollar has appreciated? Give an example of each case using the euro and the U.S. dollar
Please provide the best answer for the statement.
Depreciation means that it takes more dollars to buy foreign currencies. If one euro costs $1.25 U.S. dollars one month and then several months later a euro costs $1.30, then the U.S. dollar has depreciated in value. Appreciation of the dollar means that it takes fewer dollars to obtain foreign currencies. If one euro costs $1.50 U.S. dollars one month and then several months later a euro costs $1.40, then the U.S. dollar has appreciated in value.
Economics