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CWas withdrawn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'_
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