Exchange Rates
As we continue to understand the power of economics in a global context, evaluate the impact of exchange rate adjustments and their effects on the balance of payments. Select a current exchange rate practice and explain the economic factors that influence that practice.
Your response must go into detail with no less then 200-300 words
………………….Answer Preview……………Aldcroft and Catterall (2001) argue that, exchange rates are mostly determined by supply and demand. For instance, it is likely to have a dollar appreciation if there is big demand of American goods. Exchange rates have substantial impact on balance of payment. It is believed that, in the event of a deficit of current accounts the value of the goods is usually greater that value of exports. Forces of supply and demand determine the value of a country’s currency and are usually reflected through foreign stock exchange………………….
APA
308 words
