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.
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.
Balance of payment Accounts: It is the systematic record of all economic transactions among the residents of a country and rest of the world in a specified period (1-year) of time.
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
Components of current account of BOP account: (A) Import-Export of goods(B) Import-Export of services(C) Unilateral transfers
Explain how foreign exchange rate is determined beneath flexible exchange rate system. Beneath flexible exchange rate system, the equilibrium exchange rate is found out where demand for foreign exchange is equival
Explain all the approaches of Paul Samuelson.
Differentiate among current account and capital account of balance of payment account. State any two transactions of capital account. Answer: Q : Define foreign exchange rate Foreign Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
Normal 0
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
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