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The valuation of printed currency has always been of concern. The practice, before World War I, had been to link it to the sum of bullion held by the treasury (the so-called 'gold standard'). Net exporting econo-mies, accumulating forex (often as gold), would then find their currency's value rising; those with deficits would undergo the opposite. Meanwhile, currency and trade were private sector prerogatives, with official treasuries making requisite adjustments in terms of money supply (or coinage).
World War I and the Great Depression (1929) changed all that. The US and European economies all began experiencing increases in variance across inflation rates. That led Gustav Cassel, an economist of that era, to posit that exchange rate changes should account for differences in inflation rates. To him, terms like 'undervaluation', or 'overvaluation' were just a layman's way of saying that the going value of the exchange rate is inconsistent with the relationship that the domestic price level has with (comparable) prices ruling in a country's major trading partners. Cassel's 'purchasing power parity' (PPP) approach for determining a currency's 'correct' exchange rate was, thus, an attempt to devise a way for governments to set equilibrium currency values if they again wanted to peg to gold.
Market forces yielded place to 'policy-making' when PPP was followed by the 'elasticities approach' to balance of payments. That debunked devaluations, saying they would hardly help if the domestic demand for importables remained inelastic in the devaluing economy, while the demand for exportables in importing economies was price-inelastic too. The devaluing economy would then be left importing unchanged quantities - but at higher local-currency prices - while its exports (also unchanged) would cost less and fetch lesser amounts of foreign exchange! Hence was born the 'elasticity pessimism' doctrine. The policy prescription for avoiding such an impasse was that devaluing governments should also cut money supply to quell internal demand (or, 'absorption') to enlarge exportable surpluses. That was the 'absorption' approach to exchange rate determination. Policy-makers then had to either adopt the hard way of implementing a contractionary monetary policy by deflating the economy, or do just the opposite - and keep supporting demand and continue running up current-account deficits.
The answer to competitive devaluations, and ill-feelings all-round, was the post-War Bretton Woods Agreement (1944). A 'truce' of sorts, it pegged the dollar at $35 to 1 oz of gold, and set a rigid regime for remaining currencies. Devaluations, or otherwise, would have to be hard-fought, and after much convincing of the IMF board. But that suited Americans fine: It allowed them to fuel economic expansion with no fears of any downward pressure on the dollar! Thus, inflation was no problem for them, especially since they did not have to compensate for accelerating prices by interest rate rises. The dollar-gold parity-fix also induced capital account inflows since US dollar-denominated assets provided a 'safe' haven.
However, it all came apart over 1969-1973, after the US could no longer finance its trade deficits either through hard currency or gold. The final nail on the coffin of fixed exchange rates was hammered home in 1973. It is only out of self-interest, and a preference for predictability, that treasuries thereafter have tried to keep currencies within a restricted band against others. Within that, the US has distinguished itself by running up huge, and systematic, trade deficits - China being one of its biggest suppliers! Thus, it has long been lobbying for an upward 'correction' of the yuan's rate vis-a-vis the dollar.
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What is the worst teaching method?
The worst teaching method is one that is solely lecture-based with no interaction or engagement with students. This method does not cater to different learning styles and does not encourage critical thinking or active participation from students.
Is office furniture depreciated by the straight-line method?
Yes, office furniture is typically depreciated using the straight-line method, which evenly spreads the cost of the furniture over its useful life. This method allocates an equal amount of depreciation expense each year until the furniture's value reaches its salvage value.
Do you agree with Comte of the importance of the scientific method in any social problem?
Yes, the scientific method is crucial in understanding and addressing social problems because it provides a systematic approach to gathering evidence, analyzing data, and formulating solutions. By applying this method, we can ensure that decisions and policies are based on objective evidence rather than subjective opinions.
What is the difference between a method and methodology?
method: method is one technique that used to solve one problem to achieve the solution.methodology: 'logy' is a suffix which means 'Study of'thus methodology is the study of different methods.
Merits and demerits of inductive and deductive methods?
Inductive Method:Inductive method is an important procedure to prove a universal law. In this method, this is done by showing that if the law is true in a particular condition, then it will also prove to be true in other similar condition at any place of the world. This method proceeds from concrete to abstract and from a specific example to the universal law.As all the scientific principles and conclusions are result of induction, thus this method is considered to be one of the most important methods of teaching science.Merits of Inductive MethodBy making use of this method, following merits get accrue to the students as well as to teacher:a. As this is a scientific method, thus it helps to considerable extent in developing scientific outlook among the students.b. This method helps to develop scientific attitude among the students.c. With the help of this method, teacher can develop qualities of critical thinking and habit of keen observation among the students properly and accurately.d. This is a very logical and psychological kind of teaching science.e. By this method, students get various opportunities to play an active role in learning process.Demerits of Inductive MethodThis method has certain limitations, some of which are as follows:a. The results or conclusions drawn from such method are not found to be final in case where the amount of data is very large in number.b. All the topics of science cannot be dealt with this method properly.c. This method can only be used when teacher have much time for teaching process.Deductive Method:This method is just opposite of Inductive method. In this method, facts are being deduced by application of established formula or experimentation. In this method, one proceed from general to particular principles, from unknown to known and from abstract to concrete facts.Merits of Deductive MethodThis method has following merits:a. As students of lower classes are being provided with established scientific principles, thus this method can prove to be effective for them.b. This method is quite time saving as students are not required to analyse the universal principles.c. Teacher's duty or burden gets lessen to some extent by making use of this method as a result of which teachers find themselves in a comfortable and secured position.d. Through this method, a teacher can cover the lengthy syllabi of class in shortest period of time.Demerits of Deduction MethodThis method suffers from following demerits:a. As the approach of this method is non-conform and non-explanatory, because of which it is considered to be an unscientific method of teaching.b. Through this method, it becomes difficult for the teacher to develop scientific attitude among the students.c. As in this method, students do not get any opportunity to play active role in learning process, thus, some experts consider it as unpsychological in nature.d. Rote memory is being encouraged by this method among the students as a result of which they do not become self-independent.When to Use:It can be said that on the basis of above discussion that it is not possible make use of these methods in isolation with each other. In reality, both of these methods are incomplete without the other. By combining these methods, education of science can be imparted to students of higher and secondary levels.
What is Weighted Average of Inventory Valuation Method?
Weighted average inventory valuation method is method in which inventory purchased at any price is put together to calculate one price for allocation in contrast to FIFO or LIFO.
Whic country's currency is grand?
It is the 1 thousand unit of any currency
Which country used icelandic krona?
The Icelandic króna is the currency of Iceland. It is abbreviated as ISK and has been the official currency of the country since 1885. The currency is used exclusively within Iceland and is not adopted by any other country.
Is dyqind leke used as a currency in any country?
No, dyqind leke is not used as a currency in any country. The term "leke" refers to the currency of Albania, which is called the Albanian lek. The dyqind leke may refer to a specific denomination (200 leke), but it does not represent a distinct or separate currency.
What is a 5000 kapytaina bill worth?
The value of a 5000 kapytaina bill would depend on the currency it is associated with. If it refers to a fictional or obsolete currency, it may not have any real-world value. However, if it is a legitimate currency in circulation, its worth would fluctuate based on exchange rates and economic conditions. For accurate valuation, it is essential to identify the issuing country and current market status.
What is the cheapest currency?
The cheapest currency to purchase is the Iranian Rial as of August 19, 2014. This value can change at any moment if the country revalues its currency.
What country uses schilling as its currency?
It used to be Austria, but not any more.
What to do if your currency is not the same as the country you are trying to trade with?
If your currency differs from the country you want to trade with, you can use a currency exchange service to convert your funds into the local currency. Additionally, consider using international payment platforms that handle currency conversion automatically. It's also advisable to check the current exchange rates and any fees associated with currency conversion to minimize costs. Finally, ensure that your trade agreements accommodate any potential currency fluctuations.
What is the relationship between Interest rate parity with exchange rate?
Exchange rate is the rate at which one country's currency is changed for another country's currency. For example the rate at which one dollar can be changed for pound sterling or any other currency.
How many country currency rupee?
Your question doesn't make any sense are you trying to say how many countries use rupees as their currency??
What are the factors affecting Indian rupee changes?
The value of any currency in an economy is hard to bet, to be stable for a long period of time as there are number of factor influencing its appreciation and the depreciation. The currency value of an economy influences the growth rate of GDP in an economy. Several other factors that have a direct influence on the over or the undervaluation of a currency are listed below: Capital flows and the stock market of India It's important to note that in spite of suffering recession, an economy can grow if the capital inflow is constant or continuously rising. In India even if the GDP rate is less, the currency can still get overvalued due to excessive capital inflows made by the FII's in the Indian economy. Global currency trends Like many other currencies Indian rupee have also tied its knot with some of the big economies of the world including the names of UK, US, Japan and Canada. The depreciation or appreciation in the currency any of these, especially in the US dollar, influences the valuation of the Indian currency in one way or the other. RBI Intervention The valuation of the Indian currency highly depends on RBI that manages the 'balance of payments', slight modification in which can define the over or the under valuation of the Indian currency. Oil factors India is a major importer of oil and the valuation of Indian money gets easily affected by the increase in the prices of the crude oil. It can further result in spreading inflation in an economy due to the over valuation of the Indian currency. Political factors Several other factors that affect the currency stability are some political factors like change in the government set up, introduction of new export and import policies, tax rates and many more. Remittances from abroad Conclusively, there are many factors that arise from the economic structure of Indian economy and affect the valuation of the Indian currency that in turn affects the economic growth rate of the economy of a country.
What is the difference between a Banknote and a Currency note?
A "banknote" is the official currency of a country issued by the central banking authority of that country. A "Currency Note" is defined as any bill or note not exchangeable at par (for the local currency), issued by a person or company (not a bank) with a fixed value printed on the note.
