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How does the interest rate in a country affect equilibrium currency prices?
If a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors. This answer sounds exactly logical as I think about it, yet, in economics books, under the uncovered interest rate parity model, a country with a higher interest rate should expect its currency to depreciate. I would agree with this proposition in the long run an expensive currency will hurt exports... but in the very short run... let's say once the CB declaires a rise in interest rate, by how much should one expect the currency to appreciate? is there any formula for this?
How does a country balance of payments affect the value of its currency?
can cause fluctuations in the exchange rate between its currency and foreign currencies.
How does political and economic stability in a country affect equilibrium currency prices?
If the United States looked economically and politically more stable than other countries, more foreigners would want to put their savings into U.S. assets than in assets of another country. This would increase the demand for dollars.
What are the effect of dollarization in developing country?
since dollarization replaces country's currency, it will lead to depreciation of local currency. Investors wont find it worth investing in a country with falling local currency as it will fetch them no good return. Also, it will affect our export. Import would be expensive.
How do changes in interest rates inflation productivity and income affect exchange rates?
Some countries simply allow the exchange rate to be determined by demand and supply. Some countries attempt to keep the exchange rate between their currency and another currency constant. When countries agree to keep the value of their currencies constant, there is a fixed exchange and is called exchange rate system. Exchange rate or value of a currency is defined by its supply and demand factors. If a country has high interest rate, that will attract more investors to buy that currency to invest (increase in demand for the currency). If inflation is high, the value of the currency decreases over time and therefore not attractive to hold (decrease in demand). If the country has high productivity and does a lot of exports, foreigners will need to buy currency in order buy the goods (increase in demand).
How does the interest rate in a country affect equilibrium currency prices?
If a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors. This answer sounds exactly logical as I think about it, yet, in economics books, under the uncovered interest rate parity model, a country with a higher interest rate should expect its currency to depreciate. I would agree with this proposition in the long run an expensive currency will hurt exports... but in the very short run... let's say once the CB declaires a rise in interest rate, by how much should one expect the currency to appreciate? is there any formula for this?
Why immigration affect equilibrium?
why does immigration and emigration affect equilibrium
How does a country balance of payments affect the value of its currency?
can cause fluctuations in the exchange rate between its currency and foreign currencies.
How moral values affect a country?
The country can enjoy:solidaritypeaceful relationshigher productivity in workless environment pollutiongood and constructive relationshipsstrong family ties
How does political and economic stability in a country affect equilibrium currency prices?
If the United States looked economically and politically more stable than other countries, more foreigners would want to put their savings into U.S. assets than in assets of another country. This would increase the demand for dollars.
What are the effect of dollarization in developing country?
since dollarization replaces country's currency, it will lead to depreciation of local currency. Investors wont find it worth investing in a country with falling local currency as it will fetch them no good return. Also, it will affect our export. Import would be expensive.
How do changes in interest rates inflation productivity and income affect exchange rates?
Some countries simply allow the exchange rate to be determined by demand and supply. Some countries attempt to keep the exchange rate between their currency and another currency constant. When countries agree to keep the value of their currencies constant, there is a fixed exchange and is called exchange rate system. Exchange rate or value of a currency is defined by its supply and demand factors. If a country has high interest rate, that will attract more investors to buy that currency to invest (increase in demand for the currency). If inflation is high, the value of the currency decreases over time and therefore not attractive to hold (decrease in demand). If the country has high productivity and does a lot of exports, foreigners will need to buy currency in order buy the goods (increase in demand).
How do enzymes affect the equilibrium constant of a reaction?
Enzymes do not affect the equilibrium constant of a reaction. They only speed up the rate at which the reaction reaches equilibrium, but do not change the position of the equilibrium itself.
How does a country's currency affect tourism?
A country's currency which has declined, makes it less expensive for tourists to travel there. That said, for example, if Spain's currency has been devalued in comparison to a tourist who lives in the USA, there is a better chance of tourists visiting Spain. Tourist dollars help the country to attract tourists.
How does the exchange rate affect Britain?
Exchange rate is depends on the rate of that country currency rates and gold!
What are the factors that influence the health equilibrium?
the factors that affect the health equilibrium is the
List some factors that can affect productivity and some ways that productivity can be improved?
productivity is provide a measure to effective and efficient use resources
