--%>
Assignment Help - homework help

Fundamental supply and demand in foreign

Question:

Changes in currency supply and demand can be traced back to changes in fundamental supply and demand in foreign and domestic i._____________________ markets and foreign and domestic ii.________________________ markets as well as to changes in currency speculators' expectations vis-à-vis future relative value of the currency.
ii. Briefly Explain?

Answer:

The major forces determining exchange rate movements are the trade in goods and services, financial market transactions, including FDI, and the currency speculations. An increase in net exports leads to appreciation of currency, FDI or portfolio investment. Similarly, if there is speculation is that there will be an appreciation of currency, then there will be appreciation.

 

   Related Questions in Macroeconomics

  • Q : Profit sharing plan For the firm, the

    For the firm, the major goal of profit sharing plans is to:

    		•
  • Q : Rates of addiction and existence in a

    Harsher punishments for drug dealers than for addicts can’t be blamed for higher: (1) rates of police corruption because main dealers can present big bribes. (2) rates of street crime by addicts. (3) profits reaped by successful pushers who are uncaught. (4) rat

    		•
  • Q : Custodian of nations foreign exchange

    Name the institution that acts as a custodian of nation’s foreign exchange reserves? Answer: The Central Bank is an institution that acts as custodian of natio

    		•
  • Q : Problem on slope of demand curve The

    The demand curve for DVD games is a straight line, therefore its slope: (1) Is constant, although price elasticity of demand drops/falls as output increases. (2) Price elasticity are both stable. (3) Is constant, although price elasticity of demand increases as the pr

    		•
  • Q : Difference between

    Elucidate the differences among the frictional, structural, and cyclical forms of unemployment.

    		•
  • Q : Supply law and it's factors State the

    State the Law of supply and explain the factors that affecting supply of commodity

    		•
  • Q : Marginal utility of good at its maximum

    Can someone help me in finding out the right answer from the given options. The consumer maximizes utility whenever the spending patterns cause: (1) Marginal utility of each and every good to be at its maximum value. (2) Marginal utilities of each and every goods cons

    		•
  • Q : Econ question No need apa format no

    No need apa format no need introduction and conclusion Only answer question being ask, thanks

    		•
  • Q : State the Income Effect Can someone

    Can someone please help me in finding out the accurate answer from the following question. The Income effects are: (i) Adjustments people make since the purchasing power of the given income is modified whenever prices change. (ii) Adjustments people make since the pur

    		•
  • Q : Conditions through which the supply

    What are the conditions through which the supply curve will shift?

    		•