Pages in this set

Page 1

Preview of page 1
James Fortson




THE EXCHANGE RATE
GOVERNMENT TARGETS

A fixed exchange rate is one where the price of one currency is
the same as the price of other currencies. However, if the price
comes under threat by market forces then the central bank will
either buy/sell the currency and/or change the…

Page 2

Preview of page 2
James Fortson




If a country's interest rates increase then it is likely that the exchange rate will also rise. This is
because a higher exchange rate usually results in an increase in demand and fall in supply of the
country's currency.

People from abroad will be more willing to buy…

Comments

Whitney Koranteng

can you please add in the  Marshall-Lerner condition. thank you

Similar Economics resources:

See all Economics resources »See all resources »