The domestic currency of a country depreciates in value when:
A) there is an increase in the foreign currency price of the domestic currency.
B) its value falls in relation to another currency.
C) the government of the country revaluates the domestic currency.
D) its value rises in relation to another currency.
E) there is a fall in the domestic demand for foreign currency.

Question

Quizplus · Accepted Answer

When the value of a domestic currency falls in relation to another currency, it means that it takes more units of the domestic currency to buy a unit of the foreign currency, resulting in a depreciation of the domestic currency's value.

The Domestic Currency of a Country Depreciates in Value When