Explain how foreign exchange rates are determined


Discussion questions:

DQ 1

Explain how foreign exchange rates are determined. How do changes in interest rates, inflation, productivity, and income affect exchange rates? What are the advantages and disadvantages of a weak versus a strong dollar for imports, exports, international and domestic markets?

DQ 2

Who benefits from a tariff or quota? Who loses? Why would domestic markets benefit from protectionist trade policies? How do protectionist trade policies affect a government's wealth and fiscal policy?

DQ 3

What is the effect of a trade surplus? What is the effect of a trade deficit? How do trade deficits and surpluses affect the industry in which you work?

DQ 4

Why are trade agreements important for the various countries involved? How is international trade related to the U.S. standard of living as opposed to the standard of living of a small industrial nation or a developing nation? How does international trade affect a country's standard of living? What impact does it have on the way Americans live life, spend, consume, and so on.?

 

 

 

Solution Preview :

Prepared by a verified Expert
Microeconomics: Explain how foreign exchange rates are determined
Reference No:- TGS01825538

Now Priced at $10 (50% Discount)

Recommended (96%)

Rated (4.8/5)