- The buying and selling of currency
-Any transaction that occurs in the balance of payments necessitates foreign exchange.
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Appreciation
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Depreciation
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Increase of value of a country’s currency with
respect to a foreign currency
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Less units of dollars are needed to buy a
single unit of another country’s currency.
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The loss of value of a country’s currency, the
dollar is considered to be weaker
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More units of a dollar are needed to buy a
single unit of a currency
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