Question

Explain the price theory of exchange rate volatility.

Answer 1

i hope it will help u

Answer 2

Answer:

In 172, Pierre Prevost put forward a theory of

exchange of heat. According to this theory, all

bodies at all temperatures above the absolute zero

temperature (0 K) radiate thermal energy to the

surroundings and at the same time receive radiant

energy from the surróundings. Thus, there is

continuous exchange of radiant energy between a

body and its surroundings.

The quantity of radiant enersy (thermal energy)

emitted bya body per unit time depends upon the

naure of the emitting surtace, the area of the

surface and the temperature of he surface. The

quantity of radiant energy absorbed by a body per

unit time depends upon the nature of the absorbing

surface, the area of the surface and the time rate at

which the radiant energy is incident on the body.

If the time rate of emission of thermal energy is

greater than the time rate ot absorption of thermal

energy, the temperature of the body falls. If the

emission rate is less than the absorption rate, the

temperature of the body increases. If the emission

rate equals the absorption rate, the temperature of

the boay remains constant.

INote : A body appearS red if its temperature is around

800,and white hot if its temperature 1s around

3000 C)