Define foreign exchange rate
Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
Flexible (or floating) exchange rate system: This is a system in which exchange rate is found out by forces of demand and supply of the foreign currencies concerned in the foreign exchange market. There is no official interference in the foreign excha
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.
China is a huge manufacturer of technology of telephone devices. It has lately become a member of W.T.O. that means it can sell its products in other member countries such as India. Assume that it does export a big number of telephone instruments to India:
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
Let us suppose that US gasoline market has the demand and supply curvesQd = 10 – 0.5PdQs = -2 + Ps when Ps ≥ 2 and Qs = 0 if Ps < 2, Q : Describe the two sources of supply of Describe the two sources of supply of foreign exchange: The two sources of supply of foreign exchange are: Exports and foreign tourism.
Describe the two sources of supply of foreign exchange: The two sources of supply of foreign exchange are: Exports and foreign tourism.
safeguard against the crisis of confidence in system explain
suppose that an investor has an extra cash reserve of $1000000 to invest for one year. annually rate is 10%
Describe the meaning of deficit in BOP: Whenever autonomous foreign exchange payments surpass autonomous foreign exchange receipts, the difference is termed as balance of payments deficit.
‘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?’
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