- There is currency appreciation and currency depreciation
- Currency appreciation’s effects on trade are that it makes the currency worth more than other currencies, it makes imports cheaper, but it hurts exports and lowers GDP
- Appreciation takes place when a country exports or sells goods to another country
- Currency depreciation’s effects on trade are that it is worth less than other currencies, it makes exports stronger, and it makes imports more expensive because inputs for production bought abroad will be more expensive
- Depreciation takes place when a country imports or buys goods to another country
How do I remember it?
- Remember the word appreciation and depreciation. Appreciation means that currency is appreciated or worth more, while depreciation means bringing the value down.
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By Abraham Flores
