Any transaction that occurs in the balance of payments necessitates foreign exchange
Exchange rate is determined in the foreign exchange
Exchange rate is the price of currency
Exchange rate are a function of the supply and demand for currency
- increase in supply, decrease exchange rate
- increase in demand, increase exchange
- Appreciation of currency occurs when the exchange rate of that currency increase
- Depreciation of a currency occurs when the exchange rate of that currency decreases
- Consumers tastes
- Relative income
- Relative price level
- Speculation
Jean, Jeen, Jene, John. I like how your blog is presented. It is quite calm and soothing. The information is sufficient but a quandary I have how speculation, relative income, and relative price level affects the exchange rate? How exactly is the e affected?
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