8 min read
This study guide covers exchange rates, including appreciation, depreciation, and the reciprocal relationship between currencies. It reviews the gold standard, its history, and its limitations. It explains how to calculate prices using exchange rates and explores the factors influencing exchange rates: consumer tastes, relative income, relative inflation, and speculation. Finally, it provides practice questions and exam tips focusing on the impact of exchange rates on net exports and aggregate demand.
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Question 1 of 10
Ready to test your knowledge? 🤔 When a currency's value increases relative to another, it is called:
Depreciation
Appreciation
Inflation
Deflation