Exchange Rates

Front

What is an exchange rate?

Back

The price of one nation's currency in terms of another's.

Front

According to the table, what is the Euro equivalent of 1 USD?

Back

.76 Euros

Front

According to the table, what is the USD equivalent of 1 Australian?

Back

1.03 USD

Front

How is an exchange rate determined in the money market?

Back

The forces of supply and demand

Front

Why do changing exchange rates help one country and hurt the other?

Back

One side loses purchasing power and the other gains it

Front

What type of exchange rate system do most countries operate under?

Back

Floating

Front

What is the difference between a fixed rate exchange system and a floating rate system?

Back

Government sets rate vs market sets rate

Front

If the US $ were to appreciate in relation to the Euro, what effect would this have? Options: European consumers would have more purchasing power in US, US consumers can buy more European goods and services for fewer $$, US consumers can buy more English goods and services for fewer $$, European tourists to the US will spend more $$

Back

US consumers can buy more European goods and services for fewer $$

Front

How does inflation rate affect currency value/exchange rate?

Back

Higher inflation leads to depreciating currency & vice versa

Front

If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?

Back

Mexico has less purchasing power in Chinese currency