Term
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Definition
| the price at which one currency exchanges for another currency in the foreign exchange market |
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Term
| Quantity of US dollars demanded in the foreign exchange market- main factors that influence |
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Definition
-the exchange rate
-world demand for US exports
-interest rates in the US and other countries
-the expected future exchange rate |
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Term
| Law of Demand for Foreign Exchange |
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Definition
| Other things remaining the same, the higher the exchange rate, the smaller is the quantity of US dollars demanded in the foreign exchange market |
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Term
Exchange rate influences the quantity of US dollars demanded because
-2 reasons |
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Definition
-Exports effect
-Expected profit effect |
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Term
| Quantity of US dollars supplied in the foreign exchange market |
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Definition
| the amount that traders plan to sell during a given time period at a given exchange rate |
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Term
| Main factors supply depends on |
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Definition
-exchange rate
-US demand for imports
-interest rates in the US and other countries
-the expected future exchange |
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