Define flexible exchange rate
Flexible exchange rate: The rate of exchange in terms of other currencies is determined by market forces of demand-supply.
The practice considers the Treasury’s elucidation of the consequence on macroeconomic adjustment of joining the euro.
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.
Balance of payment: It is a systematic record of each and every economic transaction of a country with the rest of world in an accounting year.
Calculate the value of imports, if the net imports are of Rs 160 crores and the value of exports are of Rs 400 crores.
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
I NEED TO UNDERSTAND MORE ABOUT International product life cycle
Assume that El Salvador can generate coffee at lower opportunity costs than Spain, whereas Spain can generate olive oil at lower opportunity costs than El Salvador. The citizens of both countries can potentially profit from international trade since of the efficiency
Fixed exchange rate: It is the rate of exchange which is fixed by the Government in an economy.
I NEED TO UNDERSTAND MORE ABOUT PRODUCTION POSSIBILITY FRONTIER
Induced investment: It is a type of investment that is of profit motive in nature.
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