How is the exchange rate influenced by inflation
‘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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Because of the consequence on demand and supply of currency and the new equilibrium. It distinguishes among real and nominal values.
State which kind of exchange rate has no official intervention in foreign exchange market? How it is recognized?
Who explained micro and macro economics?
‘The pound has enhanced today on the foreign exchange market’ is a general media comment whenever the pound sterling appreciates. When the pound appreciates is it always excellent news for business and the economy?’
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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 : How is the exchange rate influenced by ‘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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distinguish between autonomous transactions and accommodating transactions under balance of payments
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