Describe "currency depreciation."

Currency depreciation refers to a reduction in the value of a currency relative to other currencies. When a country's currency depreciates, it means that it takes more of that currency to purchase foreign goods and services, indicating a decline in the currency's purchasing power and value on the international market. This typically occurs due to factors such as higher inflation rates, increased supply of the currency, changes in interest rates, or economic instability.

This phenomenon can have various economic implications, such as making exports cheaper and imports more expensive, which can influence trade balances and economic growth. The increase in demand for cheaper domestic goods might help stimulate local production and employment as foreign consumers find these goods more affordable.

In contrast, the other options describe scenarios that do not align with the concept of depreciation; they discuss increases in value or other economic changes that do not reflect a weakening of the currency's position in global markets. Understanding currency depreciation is crucial for analyzing international trade dynamics and the broader economic landscape.