6567582
Descrição
FlashCards por Kyle Olson, atualizado more than 1 year ago
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Criado por Kyle Olson
aproximadamente 10 anos atrás
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| Questão | Responda |
| Demand for a currency | Increases when the value of the currency decreases |
| Supply of a currency | Increases when the value of the currency increases |
| Equilibrium | Equates the quantity of a currency demanded and the supply of that currency for sale |
| Increase in demand or decrease in supply | Exchange rate will increase to the level at which quantity demanded equals quantity supplied in the foreign exchange market |
| Decrease in demand or increase in supply | Exchange rate will decrease to the level at which quantity demanded equals quantity supplied in the foreign exchange market |
| Relative inflation rates | Increase in inflation leads to increase in exchange rate for foreign currency |
| Relative interest rates | Increase in interest rates leads to increase in exchange rate for USD |
| Real interest rate (fisher effect) | Real interest rate = nominal interest rate - inflation rate |
| Relative income levels | Increase in US income leads to increase in exchange rate for foreign currency |
| Interaction of factors | Some factors place upward pressure while some place downward pressure |
| Influence of factors across multiple currency markets | It is common for European currencies to move in the same direction against the dollar |
| Influence of liquidity on exchange rate adjustment | When a currency's spot market is liquid its FX will not be highly sensitive to a single large purchase or sale |
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