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1. Depreciation and Appreciation of currency.a. Please thoroughly and completely explain how the US dollar might depreciate relative to another currency, and how that would impact U.S. GDP.b.Please thoroughly and completely explain how the US dollar might appreciate relative to another currency, and how that would impact U.S. GDP.

Question

1. Depreciation and Appreciation of currency.

a. Please thoroughly and completely explain how the US dollar might depreciate relative to another currency, and how that would impact U.S. GDP.

b.Please thoroughly and completely explain how the US dollar might appreciate relative to another currency, and how that would impact U.S. GDP.

check_circleAnswer
Step 1

Depreciation of currency is a decline in the value of one country currency in terms of another country currency under floating exchange rate system whereas appreciation of currency is a rise in the value of one country currency in terms of another country currency under floating exchange rate system.

Step 2

In part (a), there is a depreciation in the value of U.S. dollars relative to another country currency; therefore, the value of U.S. currency decline which leads to a rise in the exports from the U.S. and a decline in the imports by making imports costlier which ultimately cause a ...

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