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Which of the following is the cause of depreciation?

(a) by permanent fall in prices
(b) by constant use
(c) by expiry of time
(d) all of the options

1 Answer

6 votes

Final answer:

Depreciation can be caused by constant use, the expiry of time, and less commonly by a permanent fall in price, so all of the listed options are causes of depreciation. In financial markets, an increase in the supply of money is likely to cause a decline in interest rates. Therefore, the correct option is D.

Step-by-step explanation:

The cause of depreciation can be attributed to several factors such as: by constant use, by expiry of time, and less commonly by a permanent fall in prices. Therefore, the correct answer is (d) all of the options.

Interest Rates in Financial Markets

Changes in the financial market can affect interest rates. A decline in interest rates is most likely to result from (c) a rise in supply of money in the economy. This increase in supply typically reduces the cost of borrowing, leading to lower interest rates.

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