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My interest in value depreciation and appreciation
- 1. My interest incurrency depreciation and appreciation By Austin
- 2. Table of contents 1.title 2. Brief introduction 3. floating exchange rate system 1 4. floating exchange rate regime 2 5. floating exchange rate regime 3 6. my ideas 7. why do currency appreciate 8. why do currency depreciate 9. 10.
- 3. Brief introduction Thedepreciation of value can be simplified as the same amount of one specific currency that once can buy three pieces of candy but now can only buy half piece of candy. On the contrary, when a currency can no longer buy one piece of candy, but three pieces of candy that means the value of the currency has depreciated.
- 4. floating exchange ratesystem 1 In order to talk about currency appreciation and depreciation, first, we need to learn of the regime that it can happen in. The type of exchange rate regime’s name is floating exchange. The floating exchange allows money to change according
- 5. floating exchange ratesystem 2 The floating exchange regime allows a currency to change according to the foreign exchange market. The foreign exchange market can decide the countries' currencies values that depends on it. Without many reasonable question people decided to leave. But there is still one possible answer, the people were worried about the economcis The money has been growing unreasonably fast, and that is a sign of the country’s next few years economic will drop abruptly. However, many people did not seem to like the quedtion. buttercup
- 6. floating exchange ratesystem 3 The Bretton Woods system has made fixed currencies at 1946 and kept the currencies to the 1970s; however, in 1971, the US was no longer to satisfied with its currency exchange at 1/35th Of an ounce of gold, and decided to change, and that, has made all the differences. Soon after the US’s act, an agreement called the Smithsonian Agreement, most of the world's countries also followed the act of the United States. However, some countries, such as most of the places that are near the ocean, fixed their currency to the value of another currency, which has the slower rates of growth and are called the fixed currency.
- 7. My ideas Manythings can cause the currencies to go up and down, it can be the pressure from the other countries or the country’s getting stronger or the country’s getting weaker. One of the examples can be that Chinese currency is growing quickly, partly is because of the United States owns C1hina a lot of debts so they are trying to make Chinese currency more valuable in order to pay less.
- 8. Why do moneyappreciate? The exports of one country is very good and is being bought constantly. The forces from other countries. Such as the US is forcing the Chinese Yuan’s value to grow up suspiciously fast because US owns China a pretty big debt. If one country’s central bank can find benefits from letting the country’s currency appreciate, the central bank would encourage it.
- 9. Why do currencydepreciate? If a country’s central bank sees that if the act of letting the currency depreciate and it could gain advantages from it, the bank would encourage it.
- 10. What can peoplegain from currency depreciation Many people would fell in poverty and many people wouldn’t even be able to meet their daily life needs. If one country’s currency drops, the shoppers would likely to spend less money and cause many shops to be bankrupt.
- 11. What can thepeople gain from currency appreciation People would likely become richer.
- 12.