How does balance of payment surplus increases employment and standard of living, promotes investment inflows and strengthens exchange rate?

Q: Write a brief note on the differences between fixed and flexible exchange rate systems by describing…

A: Fixed exchange rate system: Under a fixed exchange rate (or pegged exchange rate) system, the…

Q: Why do we need foreign exchange? Write a brief note on the differences between fixed and flexible…

A: Foreign exchange is a kind of trading of different national currencies or units of account. It is…

Q: ncy syst

A: Currency is usually being issued by a government and generally being accepted as a method of payment…

Q: what excactly is a fixed exchange rate and give an example of a country that has a fixed exchange…

A: "The rate at which one country's money is exchanged for another country's currency is known as the…

Q: Discuss how expectation influences exchange rates. Thank you!

A: The exchange rate means a rate at which one country exchanging its goods and services with another…

Q: ive recommendation on how to manage exchange rates

A: Fixed exchange rate policy A fixed exchange rate provides stability to a currency. Examples of…

Q: Under a fixed exchange rate regime, if a country has an overvalued exchange rate, then its central…

A: A central bank maintains a fixed exchange rate by purchasing or selling its currency. When the…

Q: If there is a decrease in the desire of Americans to purchase goods and services from other…

A: The exchange rate is the value of domestic currency required to be paid for obtaining a unit of the…

Q: how exchange rate stability is achieve through equilibrium in balance of payment?

A: The exchange rate, as we all know, is the rate at which one currency may be exchanged for another. A…

Q: Please list and explain in your own words the benefits and costs when a country adopts a flexible…

A: The currency regime in which the exchange rate is set by the market forces of demand and supply of a…

Q: What is the relation between exchange rate and balance of payments .         -Appreciated currency…

A: BOP is a statement comprising of all the transactions between individuals of a country with the…

Q: Considering the inflation and interest differential between the US and Turkey, what is likely to…

A: Inflation is the overall increase in the general price level over a period of time in an economy.

Q: Discuss what the interest rate parity (IRP) tells us about forecasting future spot exchange rates.

A: Interest rate parity (IRP) refers to the theory according to which the interest rate differential…

Q: Discuss how the value of a currency under flexible exchange rates is determined?

A: Answer: Introduction: The exchange rate refers to the price of one currency in terms of another…

Q: Q. Find any three saarc countries, Calculate effective exchange rate too.

A: South Asian Association for Regional Cooperation (SAARC)  founded in 1985.  Effective exchange rate…

Q: Suppose U.S. interest rates decline compared to the rest of the world. What would be the likely…

A: The interest rates in the international market plays a very important role in relation to the demand…

Q: How value of exchange rate is being determined under different exchange rate systems?

A: The rate that is being depicted by the value of one currency being measured in terms of another…

Q: Explain the international balance of payments (BOP) and the reason for its use.

A: Three categories of Balance of Payment: Current account: This account tracks all international…

Q: a) and b) can both help to avoid currency crises

A: Explanation: To avoid currency crisis within the face of totally integrated capital markets, a…

Q: Discuss the effect of capital account restrictions on attaining internal and external balance with…

A: Capital account restrictions results in a lower financial integration of that country with the…

Q: he NEWS magazine uses the price of a Mercedes Benz A-class to determine whether a currency is…

A: When different countries' currencies are compared using the basket of goods approach it is called…

Q: Considering the inflation and interest differential between the America and Turkey, what is likely…

A: Assumption the data may be fluctuates it is directly taken from google America Policy Interest Rate:…

Q: Provide and explain the equilibrium equation of the Foreign Exchange Market?  Referring to the…

A: Internationally, interest rate parity is the condition that demonstrates the equilibrium between…

Q: If the domestic prices for traded goods rose 40 percent over 10 years in China and 25 percent over…

A: A rise in the price of a nation leads to a fall in the value of the currency. This happens because…

Q: How does covered interest arbitrage affect the exchange rates

A: By understanding the interest arbitrage and bringing in the interest arbitraging interest rate…

Q: Explain one difference between the forward market and the spot market in foreign exchange market

A: A foreign exchange market is a market in which there is an exchange of foreign currencies take…

Q: In the 1990s, the Thai baht was pegged to the U.S. dollar at a rate of $1.00 = 25 baht. This is…

A: To sustain the pegged rate, the Bank of Thailand increase then Thai interest rates to catch the…

Q: 2.a. Based on your expected exchange rate, not using the simple rule, answer the exact foreign rate…

A: The rate of return on a foreign deposit consists of three components: the interest rate itself, the…

Q: how the decrease in the world interest rate affects Canada's net capital outflows, exchange rate and…

A: The macroeconomic model that tests the effectiveness of fiscal and monetary policy in an economy…

Q: Define each of the following terms: e. Interest rate parity; purchasing power parity

A: Interest rate parity (IRP) plays a key role in foreign exchange markets relating interest rates,…

Q: Explain supply and demand for exchange rates

A: The demand–supply framework enables you to predict the following period’s rate. once you understand…

Q: Differentiate between floating exchange rate and exchange rate?

A: An exchange rate regulated by the economic authority with regard to a foreign currency or a bundle…

Q: What could cause an increase in the supply of Argentine pesos on the foreign exchange market? …

A: The foreign exchange market, that is also known as the over-the-counter market, is a decentralised…

Q: If a country that fixes its exchange rate increases its money supply, then its currency will become…

A: In the fixed exchange rate system, any change in money supply will lead to affect the value of…

Q: Consider the following information about a small open economy: Y=1000; C=100+.75(Y-T); I=100-5r;…

A: Answer: Given, Y=1000;C=100+.75(Y-T);I=100-5r;G=100;T=100;NX=250-16E;r*=4. At equilibrium,…

Q: Why floating exchange rate is more competitive than hard peg exchange rate?

A: In an economy whereby the supply and demand tools helps in setting the exchange rate, then such…