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what is the difference between the exchange rate in close economy and open economy
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- IF A2 1. Discuss the pros and cons of fixed exchange rate systems and flexible exchange rate systems.(1)Under a flexible exchange rate system, the three endogenous variables in the IS/LM/BP model are output, interest rates and money supply prices, output and unemployment income, output and expenditure output, interest rates and exchange rateA 3. Briefly explain below the different theories about the irrelevance/relevance of exchange rates. Think and discuss about all the firms' factors that are affected by movements in exchange rates.
- Discuss how changes in the expected exchange rate affects current exchange rateWhich of the following is a determinant of exchange rates? Answer 1. A change in consumer preferences 2. A change in productivity 3. A change in real interest rates 4. all of theseUnder a flexible exchange rate system, the three endogenous variables in the IS/LM/BP model are O income, output and expenditure O output, interest rates and money supply O output, interest rates and exchange rate O prices, output and unemployment
- Question Which of the following is a determinant of exchange rates? Answer a. A change in consumer preferences b. A change in productivity c. A change in real interest rates d. all of theseChapter 19 In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the demand for dollars?What is the difference between a spot rate anda forward exchange rate?
- 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 theseWhat are three main stages at which could be considered the effect of exchange rates? Discuss them with example.20. Which of the following is nota benefit of a single currency? Select one: O a. increased price transparency O b. reduced transaction costs O c reduced exchange rate uncertainty O d. lower interest rates