Depreciation — Social Studies definition
A decrease in a currency’s relative value.
Where it is taught
- Exchange Rates, International Payments & Price Effects — Global Connections, Risk & Economic Inquiry, Government, Civic Participation & Economics, Grade 12
In use
Appreciation and depreciation describe a currency’s change relative to another under a defined comparison.
Exchange Rates, International Payments & Price Effects
Questions using depreciation
Problem 1
Why does depreciation not guarantee a higher exporter profit?
Answer and explanation
Input costs, contracts, demand, quantities, and financing can also change. A converted sales-price advantage is one channel, not the whole profit calculation. Examine the firm’s currency exposures and relevant records.