what's the required condition for a country's Current Acoount Balance to improve after the devaluation of its currency. explain.

Q: Why was the European Monetary System introduced?

A: EMS (European Monetary system) was developed in order to link the currency of European countries…

Q: Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other…

A: In exchange rate system, If one currency appreciates, then other currency depreciates.

Q: Which one of the following is not true regarding a currency board? Currency board holds…

A: Currency board is one of the way to manage the exchange rate and foreign currency and supply of…

Q: What are the potential consequences of a country having a largeoverall debt? If you were in the…

A: A country having a debt means that it has taken a loan from  some country or some company. Large…

Q: Explain, why appreciation of exchange rate (E) today results in the increase of expected return from…

A: The question is based on the concept of impact of change in exchange rate on net return in…

Q: What happens over time to the currencies of countries with higherinflation rates than that of the…

A: Currency exchange rate is the rate at which the currency of one country is traded for another…

Q: Identify under which one of the following market the issue of treasury bills lies: a. Foreign…

A: Foreign Currency Market- It is an over-the counter marketplace where participants buy, sell,…

Q: Discuss the possible effects of Ghana’s rising public Debt on the cedi to dollar exchange rate.

A: An exchange rate is the rate at which the currency of home country can be exchanged with the single…

Q: Under the fixed exchange rate system, what was the currency against whichall other currency values…

A: Answer: Foreign exchange rate is the currency exchange rate system in which a country’s central bank…

Q: the monetary approach to the balance of payments (under flexible exchange rates) an increase in the…

A:

Q: why a organisation should consider hedging net payables or net receivables with currency options…

A: Answer: Hedging is nothing but an investment risk management strategy that reduces or controls the…

Q: In what way is the accounting for a foreign currency borrowing more complicated than the accounting…

A: The accounting for a foreign currency borrowing involves keeping track of two foreign currency…

Q: What does it mean to say that the dollar is depreciating withrespect to the euro?

A: Exchange rates are mentioned in terms of one another. It means one currency if exchanged than how…

Q: Why when the US Federal Reserve raises interest rates, some countries raise interest rates as well?…

A: The monetary payment for the privilege of borrowing money is known as interest, and it is often…

Q: xplain why the Cedi continues to depreciate against most major international cur

A: Cedi the currency of Ghana depreciated due to many reason some are domestic and some are…

Q: Discuss the effects of a country’s currency appreciation and depreciation on Balance of payment…

A: Foreign exchange transaction:   A foreign currency transaction refers to a transaction which is…

Q: One proposal to stabilize the international monetary system involves setting exchange rates at their…

A: Introduction: The word purchasing power parity (PPP) means that in two separate economies or nations…

Q: Explain why a country under monetary unions do not have assess to monetary policy

A: A monetary union is group of different nations coming together to accept a common currency to be…

Q: What does it mean when it is said that the United States is running a trade deficit? Whatimpact will…

A: Interest Rate:   A rate at which a borrower is ready to pay and depositor is ready to receive the…

Q: Which of the following items will result to foreign currency transaction gain/loss due to settlement…

A: Gains or losses from remeasurement are generally reported under net income, while foreign currency…

Q: What action should the Hong Kong Monetary Authority (which is acting as Central Bank for Hong Kong)…

A: Hong Kong Monetary Authority worked under the Banking Ordinance and the Exchange Fund Ordinanc, and…

Q: Does interest rate parity imply that interest rates are the same in all countries?

A: Introduction: When an interest rate on a domestic bond is equivalent to the interest rate on a…

Q: How does the deposit insurance help the depositors? What are the pitfalls of the scheme? Can it help…

A: Deposit Insurance is a type of insurance in which the deposit holders are protected from losses if a…

Q: value of a currency rises due to demand and supply factors, is it correct to say that the currency…

A: A fixed exchange rate can be understood as the government or national bank-imposed policy that links…

Q: What is the effect on a country’s economy of an artificially lowexchange rate? Of an artificially…

A: An exchange rate is the money of one country versus another country's or economic zone's currency.

Q: These are currency quotes found on a foreign market: GH 4.30/$, and GH 4.55/$. ii. Which currency…

A: First quote 1$ = GH4.30 Second quote 1$ = GH 4.55 In first case if you have 1$ you can buy GH 4.30.…

Q: Should the Federal Reserve take the decision to introduce its own digital currency into circulation,…

A: Efficient policymaking: Because a digital dollar would be issued and managed entirely by the Fed, it…

Q: Assume that there are substantial capital flows among Country A, Country B and Country C. How will a…

A: The exchange rate is the rate that depicts the difference between the currencies of different…

Q: Should Ghana continue to peg the Cedi against the colonial currency basket or peg to the Chinese…

A: The question is based on the concept of Financial analysis.

Q: Explain the steps necessary to take advantage of an arbitrage opportunity, which may exist between…

A: When a future yen payment is due,you need to lock in a lower price for the yen.  Currency arbitrage…

Q: If a country’s par exchange rate is overvalued, what kind of intervention would that country’s…

A: The rate at which one currency can be exchanged for another is referred to as the exchange rate.…

Q: In the monetary yapproach to the exchange rate, which of the following will cause a depreciation of…

A: Currency devaluation: In contrast to devaluation, which is the purposeful downward adjustment in the…

Q: Question- Discuss the evolution of international monetary system with the passage of time. How is…

A: The international monetary system is an interlink between the different country's monetary systems.…

Q: Which translation method does U.S. GAAP require for operations in highly inflationary countries?…

A: Foreign Currency Financial Statements: Foreign currency financial statements are those statements…

Q: Direct Intervention How can a central bank use direct intervention to change the value of a…

A: Central bank can make a direct intervention to change the value of a currency. This is achieved by…

Currency Market

The currency market, also known as the foreign exchange market, consists of currencies worldwide. This market determines the rate of all currencies based on the buying and selling of forex. It is an over-the-counter market. It is the largest and most liquid market based on trade volume.