CPE+F09+Class+22+Xrate

CPE+F09+Class+22+Xrate - 1 Class 21: Chinas Foreign...

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Unformatted text preview: 1 Class 21: Chinas Foreign Exchange Regime Show me the money! The Big Issues The elements of a foreign exchange regime Alternative choices of the regime Tensions created by the regime Consequences and choices for MNCs and foreign investors 2 Economic Theories of Exchange Rate Determination Demand & supply of one currency relative to the demand & supply of another currency Important because foreign exchange movements influence Export opportunities Profitability of trade & investment deals Price competitiveness of foreign imports Impact on foreign exchange rate movement Countrys price inflation Its interest rates Market psychology 3 Exchange Rate Regimes Today 4 No Involvement by Government Very Active Involvement by Government Market forces are Determining Exchange rate Government is Determining or Managing the Exchange rate Floating Rate Regime Managed Rate (Dirty Float) Regime Pegged Rate Regime Weaver, Economic Literacy 5 6 Weaver, Economic Literacy Case for...
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CPE+F09+Class+22+Xrate - 1 Class 21: Chinas Foreign...

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