Exchange rates, Microeconomics

Assignment Help:

EXCHANGE RATES:

The current unit focuses on exchange rates and is a more in-depth study of foreign exchange markets from the perspective of financialeconomics.You have been acquainted with balance of trade and balance of payments and variousapproaches to balance of payments. In the present unit, we get behind these theories and focus on trading of various currencies for each other. We look at foreign exchangemarkets as markets for financial assets and see who the actors in these markets are,what the mechanisms and devices for trade in these assets are, and how the pricesof these currencies are determined.

In the subsequent section we begin with a description and analysis of the workingsof foreign exchange markets. We will see that it is the biggest market for assets andround-the-clock trading takes place. In later part we explain the workings ofdifferent exchange rate regimes, particularly, fixed and flexible, but also their variants.The foreign exchange markets function under flexible exchange rate regime. We see the relative merits of the two systems and explore why many countries gave up thefixed exchange rate regime in 1973. Having explained different exchange rate regimes,we return in section 17.4 to the functioning of foreign exchange markets and explorehow exactly exchange rates (price of one currency for another) are determined in asituation of exchange rate risk, and briefly explore some strategies to deal with theserisks. Finally, we look in detail at the functioning of the exchange rate system ofIndia: how it functions, how it has changed over the years, how exchange controlswere carried out, whether total convertibility of currency is a good idea, and so on. 


Related Discussions:- Exchange rates

Components of cost, Normal 0 false false false EN-IN ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Indifferentces curve, using the tools of an indifference curve and isoquent...

using the tools of an indifference curve and isoquent, highlight on consumption and production in business economics.

Discussion perfectly competitive firm, Explain why a perfectly competitive ...

Explain why a perfectly competitive firm does not expand its sales without limit if its horizontal demand curve indicates that it can sell as much as it desires at the current mark

Demand and suply, draw the following diagrams and explain their shapes: the...

draw the following diagrams and explain their shapes: the production possibilities frontier a demand curve the demand curve for a firm in perfect competition the demand curve for a

2 econ problems, I have the answers to these two questions, but I need to k...

I have the answers to these two questions, but I need to know HOW to get these answers. Thanks. Question 1 Suppose there are two goods beverage and pizza and two inputs land, T

Marginal utility approach, using the marginal utility approach discuss how ...

using the marginal utility approach discuss how economic theory explains the optimum pattern of consumption for an individual consumer

Indifference curve, what are the properties of indifference curve

what are the properties of indifference curve

MBA, The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-...

The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-2.5Py+7.5Pz Where Px is the price of brand X, I is per-capita income, Py IS the price of brand Y, and Pz is th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd