Do you think Balance of Payment and its different components have any role in determining the exchange rate of a country? Explain your point of view.

Q: Draw a graph with the exchange rate (RM/$) on the Y-axis and the quantity of US dollars on the…

A: In the flexible exchange rate system, the demand and the supply of currency in the foreign exchange…

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: Explain the biggest advantage and the biggest disadvantage of fixed exchange rates compared to…

A: The term "fixed rate of exchange system" refers to a system within which the rate of exchange is…

Q: what is volatility in exchange rate ?

A: Exchange rate is defined as the rate at which the currency of one country is exchange for the…

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

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

Q: Use the exchange rate diagram to illustrate and explain what will happen in each of the following…

A: The level of inflation has a direct impact on the exchange rates between currencies. The country…

Q: Write a short note on the "Factors that influence exchange rates"

A: Exchange rate refers to the value of one currency for the purpose of conversing to another

Q: Why did countries like the Philippines abandon the adjustable peg system and replaced it with the…

A: Introduction: Abandoned children are a concern in the Philippines. According to the United Nations…

Q: Why is exchange rate important in International Finance? Can we get rid of Exchange rate in…

A: A. The value of the currency of one nation in terms of the currency of another nation is known as…

Q: If the monetary authority contracts money supply and the fiscal authority raises taxes, then in a…

A: When the central bank contracts the money supply with raising the interest rates, it makes the…

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: How can balance of payment surplus affect the exchange rate and cause cost-push inflation in the…

A: The balance of payment becomes surplus when the central bank sells the domestic currency and demands…

Q: Most exchange rates are free-floating.  True or False

A: A free floating exchange rate is solely determined by market forces of demand and supply of foreign…

Q: Explain why supply of foreign currency rises in response to a rise in its exchange rate?

A: Generally in the given question, The rise in exchange rate actually denotes appreciation of foreign…

Q: Are fixed or floating exchange rates better for the eurozone countries?

A: To what extent did the euro's creation alter currency policy in the Eurozone countries? The answer…

Q: What is the difference between independent floating, managed floating, and fixed exchange rate…

A: In the international market, when countries decides to make an economic exchange, the price of the…

Q: What were the implications of the 1998 Russian Financial Crisis on the exchange rate and currency…

A: The Foreign Exchange Rate is the rate at which one currency is exchanged for another. The foreign…

Q: Explain to the citizens of your country the situations that surround the balance of payment in an…

A: When an economy open ups their boundaries to make trade transactions with other economies, it will…

Q: Exchange Rate Volatility?

A: (Q) Exchange Rate Volatility?

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: Compare and contrast the direct and indirect relationships between balance of payment and inflation…

A: Balance of payments measurements (BOP) cover an economy's exchanges with the remainder of the world.…

Q: Why do exchange rates matter to companies, especially those involved with the foreign direct…

A: Exchange rate (ER) tells us how much of a currency (home) is valued against the other (foreign).…

Q: how nominal and real exchange rates are determined, in both the short runand the long run.

A: The nominal exchange rate tells how much foreign currency can be exchanged for a unit of domestic…

Q: What, then, determines exchange rates in the short run?

A: The exchange rate is determined by the market forces of demand and supply. After a certain stage,…

Q: the key role played by the law of one price in determining exchange rates.

A: One price law refers to the economic theory stating that identical products in different/various…

Q: What is the current system of exchange rates? explain

A: There are three types of exchange rate: Fixed exchange rate: This implies when the value of one…

Q: Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt…

A: The exchange rate refers to the price of one nation's currency in terms of another nation's…

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…