With the help of a diagram, explain three factors that would cause a currency to appreciate in value.
With the help of a diagram, explain three factors that would cause a currency to appreciate in value.
A currency is the system of money that is used in a particular country. For example, India uses rupees and Japan uses Yen. However, in order to know how much a currency is worth in the world´s economy, we need to compare it to another currency. This is known as exchange rate, when the value of one currency is expressed in terns of another. There are three types of exchange rates :