econ3 10-1

econ3 10-1 - Exchange Q of foreign2-22-08 Demand exchange...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Demand Q of foreign exchange Exchange Rate 2-22-08 Ch. 10 (Exchange Rate and the Balance of Payment) - Foregin Currency o Money of other countries. (yen, pound, etc…) o Perspective matter o Compare one currency to other - Exchange Rate o Value of one currency in terms of other currencies - U.S. nominal exchange Rate o The value of the U.S. dollar, in terms of a foreign currency. o The amount of a foreign currency that can be purchased with one U.S. dollar o It’s like asking what can you buy with U.S. dollar!!! o Ex. o Feb 2007 o Feb 2008 o Canada o 1.16 o 1.01 o Eu. o .76 o .68 o Mexico o 11.01 o 10.80 o China o 7.76 o 7.14 o Japan o 121.0 o 107.5 Importing lead to decrease in currency When value of dollar decreases, it means U.S. bought other currencies more than sold its currency. - Nominal Depreciation o Decrease in the value of currency o A fall in the nominal exchange rate - Foreign Exchange market
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
o Market in which the currency of one country is exchanged for the currency of
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

econ3 10-1 - Exchange Q of foreign2-22-08 Demand exchange...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online