Define fixed exchange rate
Fixed exchange rate: It is the rate of exchange which is fixed by the Government in an economy.
Components of capital account of balance of payment: A) Borrowing and lending to and from abroad.B) Change in foreign exchange reserves C) Investment to and from abroad.
If exchange rate of foreign currency downs or falls, its demand rises. Describe how? Answer: If exchange rate falls, an import become cheaper, demand for imports in
5. What are the factors responsible for the recent surge in international portfolio investment?
State the two sources of demand of foreign exchange: Import of services and goods and to acquire education in abroad.
Autonomous or public investment: It is a type of investment that is not of profit motivated.
Find a recent survey about a trade policy issue and assess it, examining the structure of the questions and the target audience. Verify the sample size, assess the methods used to administer the survey and analyze results, identifying the confidence around the results
Peanut butter, jelly sandwiches and tuna fish sandwiches are replacements. Assume an international agreement decreased the worldwide catch of tuna by half. The equilibrium price of grape jelly would be: (1) Increases while the equilibrium quantity is reduced. (2) Drop
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‘The country has a floating exchange rate and its inflation rate is much higher than its trading partners. Why we would suppose the country’s exchange rate to deflate?’
Describe the two sources of supply of foreign exchange: The two sources of supply of foreign exchange are: Exports and foreign tourism.
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