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Why does the supply curve in the foreign-currency exchange market become vertical in an open economy?

In an open economy, the supply curve in the foreign-currency exchange market becomes vertical because the central bank can adjust the supply of its currency to meet the demand, ensuring stability in the exchange rate.


What are the effects of depreciating currency on a country?

Depreciating currency in a country will determine how strong the current economy of a country is. If the currency drops then their economy is stronger and more investements are in while if the currency exchange is high, there is depreciating economy against other countries.


When money is used in a trade instead of the direct exchange of goods it acts as a A unit of account B trade equalizer C currency converter D medium of exchange?

When money is used in a trade instead of the direct exchange of goods, it acts as a D medium of exchange. This function allows for the buying and selling of goods and services without the need for bartering, facilitating smoother transactions in the economy.


In a market economy what organizes and coordinates the production of goods and services?

Exchange


Is barter the main means of exchange in command economy?

No, barter is not the main means of exchange in a command economy. In such economies, the government typically controls production and distribution, determining what goods and services are available and their prices. Currency is usually used for transactions, but the government may heavily regulate or control the flow of money. Barter may occur informally, but it is not the primary method of exchange.

Related Questions

What does currency exchange facilitate?

In the same way that money facilitates exchange in a single economy, exchange of currencies facilitates the exchange of goods and services across the boundaries of countries.


What is the basis of currency exchange rate?

It's basically the demand for the currency, which is determined by the economy of a country.


What economy accepts goods and services in exchange for commodities?

barter economy


Why does the supply curve in the foreign-currency exchange market become vertical in an open economy?

In an open economy, the supply curve in the foreign-currency exchange market becomes vertical because the central bank can adjust the supply of its currency to meet the demand, ensuring stability in the exchange rate.


What are the effects of depreciating currency on a country?

Depreciating currency in a country will determine how strong the current economy of a country is. If the currency drops then their economy is stronger and more investements are in while if the currency exchange is high, there is depreciating economy against other countries.


When money is used in a trade instead of the direct exchange of goods it acts as a A unit of account B trade equalizer C currency converter D medium of exchange?

When money is used in a trade instead of the direct exchange of goods, it acts as a D medium of exchange. This function allows for the buying and selling of goods and services without the need for bartering, facilitating smoother transactions in the economy.


How does the exchange rate of nations currency influence the balance of payments of an economy?

bhag madarchod


In a market economy what organizes and coordinates the production of goods and services?

Exchange


In market economy what organizes and coordinates the production of goods and services?

Exchange


What was the role of currency in Mesopotamia's economy?

Currency did not exist in Mesopotamia. Instead, the economy relied on a barter system where goods and services were exchanged directly without the use of money.


Is barter the main means of exchange in command economy?

No, barter is not the main means of exchange in a command economy. In such economies, the government typically controls production and distribution, determining what goods and services are available and their prices. Currency is usually used for transactions, but the government may heavily regulate or control the flow of money. Barter may occur informally, but it is not the primary method of exchange.


Do currency exchange rates differ from day to day?

The currency exchange rate changes literally every day. This is due to the fact that the currency much like the economy will fluctuate each day both negative and positive depending on the features of the day.