Cost of a foreign currency

When cost of a foreign currency increases its supply too increases. Elucidate why?

E

Expert

Verified

When exchange rate rises, this will make domestic country’s goods cheaper to foreigners. The demand for our exports will increase. It entails more supply of the foreign exchange.

   Related Questions in Macroeconomics

  • Q : Fiscal and Monetary policies How can

    How can governments seek to control their national economies through fiscal and monetary policies?

  • Q : Problem on Imperfect information

    Imperfect information at times causes consumer’s attempts to maximize their contentment to fail since: (i) Prospects are imperfectly realized, and trial-and-error prototypes can lead to mistakes. (ii) Sellers might exploit asymmetric information

  • Q : The Fed can control the Fed funds rate

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have o

  • Q : Paradox of Value-High values of

    The fact that most of the necessities for life like water are priced much lower than the frivolities like diamonds is addressed by the: (1) Utilitarian enigma. (2) Law of diminishing marginal utility. (3) Rational ignorance of hypothesis. (4) Paradox of the value. (5)

  • Q : Signals that guide economic decisions

    In market economies, what are the signals which guide economic decisions?

  • Q : Balance the budget general approaches

    Quetion: Explain why there are long-term Federal government budget problems.   Explain why the base-line forecast of the CBO is misleading.   Include in your answer why solutions to the problem

  • Q : The European debt crisis Quetion:

    Quetion: Describe the present economic crisis situation in Europe.   Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the

  • Q : Origin of scarcity problem for each

    Can anybody suggest me the proper explanation for given problem regarding problem of scarcity in economics generally. The problem of scarcity means that the origin for each economic activity is to: (v) facilitate s

  • Q : Problem of Financial Capital for direct

    The direct economic resources a farmer employs to generate avocadoes would not comprise: (I) human capital in form of expertise regarding growing avocadoes. (II) fertile land. (III) loans from a bank to finance SUCH year’s crop. (IV) machinery,

  • Q : How commercial bank make money How does

    How does a commercial bank make money? Answer: Commercial banks are capable to make credit that is many times greater than deposits received by banks. Money creatio

©TutorsGlobe All rights reserved 2022-2023.