Asked by Cynthia Frias on Jul 03, 2024

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When a currency depreciates relative to other currencies as a result of government action,

A) it has appreciated.
B) it has been devalued.
C) it has been debased.
D) it has become worthless.
E) it has been subject to runaway inflation.

Currency Depreciates

Refers to a decrease in the value of a currency in comparison to other currencies, which can affect international trade and economic balance.

Government Action

Any activity or policy implemented by a government to influence economic, social, or political issues.

Devalued

Devalued is a term used to describe a reduction in the value of a currency with respect to other currencies, often through government policy.

  • Discern the determinants leading to currency valuation fluctuations.
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ZK
Zybrea KnightJul 08, 2024
Final Answer :
B
Explanation :
When a currency depreciates relative to other currencies as a result of government action, it has been devalued. Devaluation is a deliberate downward adjustment to the value of a country's currency against its trading partners. It makes the country's exports cheaper and its imports more expensive, which can help to improve its trade balance. Devaluation can also be used as a tool to manage a country's external debt.