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Chapter 14 Notes

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Chapter 14 Notes taught by Stella Hangfu in Semester 1, 2013, University of Sydney

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3 Pages Partial Study Notes > 2 Years old
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Chapter 14 Notes
Topics this document covers:
Politics Economics Macroeconomics Exchange rate Monetary policy International economics Economic indicators Foreign exchange market Currency Fixed exchange rate Devaluation Fixed exchange-rate system Foreign-exchange reserves
This is a Partial Set of Study Notes

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Topics this document covers:
Politics Economics Macroeconomics Exchange rate Monetary policy International economics Economic indicators Foreign exchange market Currency Fixed exchange rate Devaluation Fixed exchange-rate system Foreign-exchange reserves
Sample Text:
592 UK Pounds will buy one $AUD and 0.917 US Dollars will buy one $AUD 0.592 = 0.917 o Dividing both by 0.917 0.646 pounds = 1 US dollar Appreciation: an increase in the value of a currency relative to the other currencies Depreciation: a decrease in the value of a currency relative to the other currencies Flexible Exchange Rate: an exchange rate whose value is not officially fixed, but varies according to the supply and demand for the currency in the foreign exchange market Foreign Exchange Market: the market on which currencies of various nations are traded for one another Fixed Exchange Rate: a rate whose value is set by official government policy 14.2 Real Exchange Rate Real exchange rate: tells us the price of the average domestic good or service in terms of the average foreign good or service A co...
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