Influence of demand in exchange rate
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 increases and therefore increases the demand of foreign exchange to buy more imports.
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 increases and therefore increases the demand of foreign exchange to buy more imports.
‘The pound has enhanced today on the foreign exchange market’ is a general media comment whenever the pound sterling appreciates. When the pound appreciates is it always excellent news for business and the economy?’
Managed floating exchange rate: This is a system in which the central bank or Government permits the exchange rate to identify market forces although they take decisions to intervene whenever they feel it suitable.
‘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?’
Which transactions- autonomous or accommodating carry balance in BOP? Answer: Accommodating transactions carry balance in the BOP or balance of payment.
Explain all the approaches of Paul Samuelson.
‘How is the equilibrium £:€ exchange rate presently determined? When UK was aiming to adopt the euro in the next to future we would be predicted to ‘shadow’ the euro for a while (the £:€ exchange rate would change merely among v
State which kind of exchange rate has no official intervention in foreign exchange market? How it is recognized?
Managed floating rate system: This is a system in which foreign exchange rate is found out by market forces and central bank is a key contributor to stabilize the currency in condition of tremendous appreciation or depreciation.
In a completely employed economy, the higher the yield of capital goods, and the bigger its: (1) Present living standards. (2) Present output of consumer goods. (3) Growth of capacity for the future production. (4) Rates of inflation and unemployment.
Induced investment: It is a type of investment that is of profit motive in nature.
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