Question
Economics Question on Money and Banking
Under flexible exchange rate, when the price of domestic currency in terms of foreign currency increases, it is called_______
A
Depreciation of domestic currency
B
Appreciation of domestic currency
C
Devaluation of domestic currency
D
Revaluation of domestic currency
Answer
Appreciation of domestic currency
Explanation
Solution
Appreciation refers to an increase in the value of domestic currency in a flexible exchange rate system.