Which of the following is a determinant of exchange rates? a. A change in consumer preferences b. A change in productivity c. A change in real interest rates d. all of these

Q: _1). is a market for The foreign exchange market converting the currency of one country into that of…

A: “Since you have posted a question with multiple subparts, we will solve first three subparts for…

Q: A country’s current account position moves from a surplus to a deficit. What will be the result?…

A: Current Account Current Account means recording a nation’s transactions with the rest of the world.…

Q: Which of the following provides the link between interest rate parity and unbiased forward rates? A.…

A: Uncovered Interest rate Parity As per uncovered interest rate parity theory the difference in…

Q: What is the purchasing power exchange rate?

A: Purchasing power exchange rate is the rate at which one currency is converted into another currency…

Q: According to you what is likely to happen to the exchange rate taking nto account the combined…

A: Real interest rate can be defined as the rate that has been adjusted for the inflation. If exchange…

Q: Relative inflation rates affect interest rates, exchange rates, the overall economic health of a…

A: Answer 1:The statement is a “valid” statement.Justification: The interest rate may comprise two…

Q: In the interest parity condition, why does the market exchange rate relate negatively to the…

A: The exchange rate is the rate at which currencies are exchanged for one another in the foreign…

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: How does an investor earn in the foreign exchange market?

A: The foreign exchange market comes into exitance where currencies of different countries can be…

Q: Exchange rates fluctuate under both the fixed exchange rate and floatingexchange rate systems. What,…

A: Fixed exchange rate: Fixed exchange rate is formally set by the administration or monetary authority…

Q: How can the company use currency options to hedge against exchange rate risk?

A: Those companies which have exposure to foreign markets hedge their risk with currency swap forward…

Q: What is currency appreciation?

A: It is defined as the increase or improvement in the estimation of a national money over the…

Q: Question Which of the following is a determinant of exchange rates? Answer a. A change in consumer…

A: Exchange rates are rates of foreign currency with respect to domestic currency. For example,  1 $ =…

Q: Refer to the attached diagram to answer the following question: Will the level of saving and…

A: In four sector economy, income is determined by the following formula: Y = C + I + G + (X-M)  where,…

Q: What is the benefits of floating exchange rates?

A: Floating Exchange Rate  refers to a methodology where price of currency of a nation is determined by…

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 difference between a spot rate anda forward exchange rate?

A: There are two types of currency exchange rates available namely forward exchange rate & spot…

Q: All of the following typically tend to be short-term determinants of exchange rates between currency…

A: Exchange Rate: The value of a nation's currency in relation to the currency of another country or…

Q: if we to use the monetary approach to exchange rate determination, what would be the predicted…

A: The monetary approach to exchange rate determination- According to this approach the exchange rate…

Q: explain what economists attribute so much attention to Real Exchange Rates? Provide an answer that…

A: Exchange rates are the rates in which one currency could be exchanged into the currency of another…

Q: Which of the following is a determinant of exchange rates? Answer 1. A change in consumer…

A: D. All of these

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: 2. The Is - LM -UIP Model Consider an economy that experiences an increase in consumer confidence.…

A: A fixed-rate, often known as a pegged rate, is one that the government (central bank) establishes…

Q: What is foreign exchange rate?

A: The foreign exchange rate is the relative representation of domestic currency in terms of value of…

Q: Which of the following theories can be assessed using data that exists at one specific point in…

A: Purchasing power parity: Purchasing power parity (PPP) is a concept which means that exchange rates…

Q: long position in foreign exchange? Does a successful Long position mean the currency price becomes…

A: A Long Position  also known as simply Long is the buying of stock, currency or commodity with the…

Q: Which of the following is/are TRUE with respect to spot market liquidity? I. The market liquidity…

A: We know that Spot market is used for immediate liquity which is normally happens on T+2 Days. It is…

Q: What are three main stages at which could be considered the effect of exchange rates? Discuss them…

A: There are three main stages in the life of a transaction exposure that could be considered the…

Q: What risk is due to changes in the level of interest rate in the economy and may affect industries…

A: Change in level of interest rate in the economy affects industries at the same time and is a major…

Q: What is the current market view on EUR/USD? (Will it appreciate or depreciate? and why?)

A: EUR/USD  is one of the most traded pairs in Forex.

Q: The bid-ask spread on an exchange rate implies _______. A. the transaction cost of foreign exchange…

A: Step 1 The spread of a bid-ask is the difference between the asking and bid prices in the market. A…

Q: What are two advantages and two disadvantages of a fixed exchange rate?

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Which of the following aspects will be included in Macroeconomic policies? O a. Government spending…

A: Macroeconomics will include Government spending and borrowing as it affects GDP. It will also…

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.