Depreciation: A decrease in the value of a currency relative to another currency, making exports cheaper and imports more expensive.
How to apply it: Explain how depreciation increases net exports and shifts AD to the right, other things equal.
Course: AP Macroeconomics · Unit: Open Economy: International Trade and Finance
Practice questions about Depreciation on AimFive — get rubric-based feedback showing exactly which points you earned.
AP and Advanced Placement are trademarks of College Board. AimFive is not affiliated with or endorsed by College Board.