Ch28 Exchange Rates

Front

What is an exchange rate?

Back

The price of one currency in terms of another currency.

Front

How is the exchange rate usually expressed?

Back

In terms of US dollars, as the dollar is the most widely used currency for international transactions.

Front

What is a floating exchange rate?

Back

An exchange rate determined by the market forces of demand and supply.

Front

What is depreciation in currency terms?

Back

A fall in the value of a currency, causing a reduction in export prices in terms of foreign currencies and a rise in import prices in terms of the domestic currency.

Front

What is appreciation in currency terms?

Back

An increase in the value of a currency, causing an increase in export prices in terms of foreign currencies and a fall in import prices in terms of the domestic currency.

Front

What is a hot money flow?

Back

A short-term movement of money between countries.