Which one of the following statements is the MOST accurate?
A) Devaluation reflects a deliberate government decision.
B) Depreciation reflects a deliberate government decision.
C) Devaluation reflects a deliberate government decision while depreciation is an outcome of government actions and market forces acting together.
D) Depreciation reflects a deliberate government decision while devaluation is an outcome of government actions and market forces acting together.
E) Devaluation and depreciation have the same meaning and the same causes.

Question

Quizplus · Accepted Answer

Devaluation is a deliberate government decision to reduce the official value of the country's currency in relation to other currencies. Depreciation, on the other hand, is a decline in the value of a currency due to market forces such as supply and demand. However, government actions can also contribute to depreciation. Therefore, devaluation is typically a deliberate decision by the government while depreciation can result from a combination of government actions and market forces.

Which One of the Following Statements Is the MOST Accurate