Depreciation and Appreciation (cont) An appreciated currency is more valuable, and therefore it can buy more foreign produced goods that are denominated in foreign currency A Nissan costs 42, 500,000=$27, 962.50 at Es/y= 0.011185 becomes less expensive $25,000 at Es/=0.010 An appreciated currency means that imports are less expensive and domestically produced goods and exports are more expensive An appreciated currency raises the price of exports relative to the price of imports Copyright G 2012 Pearson Education. All rights reserved 14-10Copyright © 2012 Pearson Education. All rights reserved. 14-10 Depreciation and Appreciation (cont.) • An appreciated currency is more valuable, and therefore it can buy more foreign produced goods that are denominated in foreign currency. – A Nissan costs ¥2,500,000 = $27,962.50 at E$/¥= 0.011185 – becomes less expensive $25,000 at E$/¥= 0.010 • An appreciated currency means that imports are less expensive and domestically produced goods and exports are more expensive. • An appreciated currency raises the price of exports relative to the price of imports