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A floating exchange rate describes an exchange rate that is determined by the market forces of supply and demand without direct government or central bank intervention. In this system, currency values fluctuate freely based on economic conditions, interest rates, inflation, and other factors. This allows for greater flexibility in responding to economic changes but can lead to increased volatility in currency values.
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Which if the following best explains what happens to the exchange rate of a floating currency?
The exchange rate of a floating currency is determined by market forces, primarily supply and demand for that currency in foreign exchange markets. Factors such as interest rates, inflation, political stability, and economic performance can influence these forces, causing the currency's value to fluctuate. When demand for a currency increases relative to others, its value rises, and vice versa. Consequently, the exchange rate can change frequently based on economic news and market sentiment.
How a forward premium or discount is computed?
forward exchange rate can be computed from spot exchange by adding or subtracting premium ir discount. also forward rate can be at forward premiun of discount when comapred to spot exchange rate.
What is a good currency exchange rates calculator?
Google has a currency exchange rate calculator as well as xe, x-rates, and Go Currency. Alternatively there are currency exchange rate calculators located at malls where you can exchange one currency for another.
If the exchange rate between the US dollar and the Canadian dollar is 11.3 is true?
If the exchange rate between the US dollar (USD) and the Canadian dollar (CAD) is 11.3, it means that 1 USD is equivalent to 11.3 CAD. This would be an unusually high rate, as typical exchange rates are generally much lower, often around 1.3 to 1.4 CAD per USD. Such an exchange rate could indicate an error or misinterpretation, as it is not reflective of standard market conditions. Always check reliable financial sources for accurate exchange rates.
Which of these describes an adjustable rate mortgage?
it is subject to changes in interest rates.
Which exchange rate is following by India?
Floating Exchange Rate
If the supply and demand for currency determines the exchange rates this is called?
floating
Features of floating exchange rate?
In a floating exchange rate system, the rates keep on changing according to the economic conditions. The rates of the currencies are never fixed.
Fiscal and monetary policies under managed floating exchange rate regime?
Fiscal and monetary policies under managed floating exchange rate regimes?
What is the difference between a floating and a pegged exchange rate?
pegged exchange rate is officially fixed in terms of gold or any other currency in foreign exchange. Floating exchange rate is flexible rate in which value of currency is allowed to adjust freely determined by the supply & demand of foreign exchange
What is a currency whose value is determined by the supply and demand for the currency in the market?
Pegged currency ^For me on apex 2022 :)
Which is more conducive to international trade the fixed or the floating exchange rate?
fixed rate
What is the floating dollar?
When the dollar is under a flexible exchange rate regime
What statement describes the foreign exchange rate?
The foreign exchange rate is also known as the exchange rate. This is defined as the difference between two currencies.
Discuss whether it is better for a country with a floating exchange rate to face an appreciation or depreciation of its currency?
The great atraction of a floating exchange rate is that in theory it provides a kind of automatic mechanism for keeping the balance of payment in equilibrium.
What are the effect of floating exchange rate if the government increase tariff?
increase in importation of the products
Which term best describes the rate at which a country's currencies convert to other currencies?
exchange rate
