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1 January, 18:06

Use the supply and demand of United States dollars to fully explain a situation that would cause the American dollar to depreciate.

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  1. 1 January, 18:36
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    The increase in supply leads to depreciation while the increase in demand leads to appreciation.

    If an American demand another currency, he/she needs to supply his/her own currency.

    Example: In a situation, whereby an American wants to buy German products, he/she will supply dollars to pay for euros. In this scenario, the euro appreciates because there's increase in its demand, while dollar depreciates because there is increase in its supply.
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