International Finance

increase in the exchange rate (S)

• increase price of foreign exchange and depreciation of domestic currency

• decrease in the number of units of domestic currency required to buy a unit of foreign exchange and appreciation of domestic currency

• decrease price of foreign exchange and appreciation of domestic currency

• increase in the number of units of domestic currency required to sell a unit of foreign exchange and depreication of domestic currency

decrease in the exchange rate (S)

• increase price of foreign exchange and depreciation of domestic currency

• decrease in the number of units of domestic currency required to buy a unit of foreign exchange and appreciation of domestic currency

• decrease price of foreign exchange and appreciation of domestic currency

• increase in the number of units of domestic currency required to sell a unit of foreign exchange and depreication of domestic currency

spot rate

• current price for the purchase/sale of currency

• specified predetermined price for a specific date in the future

forward rate

• current price for the purchase/sale of currency

• specified predetermined price for a specific date in the future

Bid rate

• Rate at which dealers buy currency A (and sell currency B)

• Rate at which dealers sell currency A (and buy currency B)

Offer/ask rate

• Rate at which dealers buy currency A (and sell currency B)

• Rate at which dealers sell currency A (and buy currency B)

shift to right in demand line

• excess demand, appreciation

• excess demand, depreciation

• excess supply, appreciation

• excess demand, depreciation

current account

• trade balance + income balance + net unilateral transfers

• trade balance + income balance

• goods balance + services balance

• trade balance + net unilateral transfers

trade balance

• Exports - Imports

• Investment income

• gifts and government transfers

income balance

• Exports - Imports

• Investment income and International compensation to employees

• gifts and government transfers