Skip to main contentSkip to solution

What does an increase in a country's exchange rate implies in terms of foreign currency?

Solution

✅ Correct Option: 3

The exchange rate is quoted as units of domestic currency per unit of foreign currency. A rise in this rate means more domestic currency is needed to buy the same foreign currency, so the domestic currency has lost value in terms of foreign currency, which is depreciation.

Keyboard Shortcuts

  • Left arrow: Previous question
  • Right arrow: Next question
  • S key: Jump to solution
  • Q key: Jump to question