How the exchange rate is determined in the foreign market?
Answers
Explanation:
Four ways to determine the rate of foreign exchange are:
Four ways to determine the rate of foreign exchange are:(a) Demand for foreign exchange (currency) (b) Supply of foreign exchange (c) Determination of exchange rate (d) Change in Exchange Rate!
Four ways to determine the rate of foreign exchange are:(a) Demand for foreign exchange (currency) (b) Supply of foreign exchange (c) Determination of exchange rate (d) Change in Exchange Rate!In a system of flexible exchange rate, the exchange rate of a currency (like price of a good) is freely determined by forces of market demand and supply of foreign exchange.
Four ways to determine the rate of foreign exchange are:(a) Demand for foreign exchange (currency) (b) Supply of foreign exchange (c) Determination of exchange rate (d) Change in Exchange Rate!In a system of flexible exchange rate, the exchange rate of a currency (like price of a good) is freely determined by forces of market demand and supply of foreign exchange.
Four ways to determine the rate of foreign exchange are:(a) Demand for foreign exchange (currency) (b) Supply of foreign exchange (c) Determination of exchange rate (d) Change in Exchange Rate!In a system of flexible exchange rate, the exchange rate of a currency (like price of a good) is freely determined by forces of market demand and supply of foreign exchange. Expressed graphically the Intersection of demand and the supply curves determines the equilibrium exchange rate and equilibrium quantity of foreign currency. This is called equilibrium in foreign exchange market).
Four ways to determine the rate of foreign exchange are:(a) Demand for foreign exchange (currency) (b) Supply of foreign exchange (c) Determination of exchange rate (d) Change in Exchange Rate!In a system of flexible exchange rate, the exchange rate of a currency (like price of a good) is freely determined by forces of market demand and supply of foreign exchange. Expressed graphically the Intersection of demand and the supply curves determines the equilibrium exchange rate and equilibrium quantity of foreign currency. This is called equilibrium in foreign exchange market).Let us assume that there are two countries—India and USA—and the exchange rate of their currencies, viz., rupee and dollar are to be determined. Presently there is floating or flexible exchange regime in both India and USA. Therefore, the value of currency of each country in terms of the other currency depends upon the demand for and supply of their currencies.