--%>

How is the exchange rate influenced by inflation

‘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?’

E

Expert

Verified

Because of the consequence on demand and supply of currency and the new equilibrium. It distinguishes among real and nominal values.

   Related Questions in International Economics

  • Q : Why Supply of foreign exchange is made

    Supply of foreign exchange: (A) By exports of services and goods(B) Direct foreign investment in residence country(C) For approximate purchases by non-residents in the home country(D) Remittances

  • Q : State the two sources of demand of

    State the two sources of demand of foreign exchange: Import of services and goods and to acquire education in abroad.

  • Q : Indian economic what are the key

    what are the key callenges to indian economic development

  • Q : Problem related to Capitalism leisure

    The French phrase ‘laissez-faire’ almost translates as: (1) Enjoy your leisure. (2) Let the buyer be cautious. (3) All other things held steady. (4) Leave us alone. (5) Labor is a source of all the value.

    Q : Manegment . In 2007 and 2008 Boeing ran

    . In 2007 and 2008 Boeing ran into several publicized issues with regard to its management of a globally dispersed supply chain. What are the causes of these problems? What can a company such as Boeing do to make sure such problems do not occur in the future?

  • Q : Setting tone for subsequent generations

    Who was responsible for setting the tone for following generations of economists?

  • Q : System characterization of US economy

    The U.S. economy is an instance of a system characterized by: (1) Mixture of different aspects of various economic systems. (2) Strictly decentralized the decision making process. (3) Centralized ownership of resources. (4) Political decisions regarding all allocative

  • Q : LORENZ CURVE THE AREA BETWEEN THE

    THE AREA BETWEEN THE LORENZ CURVE OF A COUNTRY AND THE DIAGONAL OF PERFECT EQUALITY REPRESENT

  • Q : Wars that have an impact on Global

    I need an outline paper and a 15 page research paper double space on this topic. I have to provide at least 5 cited reports, but not limited to just 5 cites. Professor made comment below. The topic is too broad and I suggest that you focus on a war for which you can get enough economic data to

  • Q : Current account of Indias Balance of

    State the items that are not involved in the current account of India’s Balance of payment. Answer: The capital transactions is in the form of direct and portf