Home › AP Macroeconomics › Economics › Exchange Rates and International Capital Flows › The dollar losing a quarter of its value between…
The dollar losing a quarter of its value between 2002 and 2008 is an example of a currency that:
AAppreciated
BWas hard pegged
CWas withdrawn
DDepreciated
Answer & Solution
Correct answer: D. Depreciated
1. Apply the vocabulary to the historical case.
2. A strengthening currency appreciates and a weakening one depreciates.
3. From 2002 to 2008 the US dollar lost more than a quarter of its value.
4. That loss was in foreign currency markets.
5. Losing value against other currencies means the dollar depreciated.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Exchange Rates and International Capital Flows'_
Related questions
A hard peg differs from a soft peg mainly in that the hard peg holds the rate:Arbitrage across borders is only profitable when the same item has prices that are:A country whose central bank never intervenes in currency markets operates which regime?A currency that buys more foreign goods than it did last year has:Alongside size and participants, the overview covers the vocabulary for discussing:The opening overview of foreign exchange markets covers their size and their main:The dollar's 2002 to 2008 loss of value occurred in which markets?A hard peg policy is described as attempting to preserve a fixed exchange rate: