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When the exchange rate increases, it means that a currency has strengthened relative to another currency. This can make exports more expensive and imports cheaper, potentially reducing demand for domestic goods while increasing demand for foreign goods. Consequently, it can affect a country's trade balance and overall economic performance. Additionally, a higher exchange rate may attract foreign investment, as investors seek to take advantage of the stronger currency.
What else can I help you with?
When a country experiences capital flight what is the effect on its interest rate and exchange rate?
interest rate decreases and exchange rate increases
What happens to the future value of money when the inflation rate exceeds the interest rate?
it increases
Which of e 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 the foreign exchange market. Factors such as interest rates, inflation, political stability, and economic performance influence these dynamics. When demand for a currency increases, its value rises; conversely, if demand decreases or supply increases, the currency's value falls. This continuous fluctuation reflects the relative economic conditions of the countries involved.
What is REER in exchange rate?
The real effective exchange rate based on real exchange instead of nominal exchange rate in foreign currency exchange.
What is an unfavorable exchange rate?
unfavourable exchange rate movement
When a country experiences capital flight what is the effect on its interest rate and exchange rate?
interest rate decreases and exchange rate increases
What happens when temperature?
rate increases
What happens to a person's respiratory rate when carbon dioxide increases?
It increases.
What happens to the rate constant as energy increases?
The rate constant decreases.
Wolves are predators for hares The wolf population increase what happens next?
The Death Rate of hares increases.
What happens to the heart when you smoke?
Your heart rate increases.
What happens to the future value of money when the inflation rate exceeds the interest rate?
it increases
What happens as the rate of a resource's use decreases its?
sustainability increases.
What happens to the heart when you smoke marijuana?
Your heart rate increases.
What happens to the bloodflow and heart rate during a footballgame?
It INCREASES.
What happens when either the birth rate or death rate increases in a population?
Usually yes, but you do have to take migration, immigration into account.
What happens to population when the death rate decreases?
Birthrate Usually Increases.
