Mr Natuvan
Introductory Macroeconomics – NA1019
Chapter 9 – The Exchange Rate and the Balance of Payments
Catia Cialani-cci@du.se
Some questions to be answered…
The dollar, the yen, and the euro are three of the world’s monies. But they are among more than 100 different monies that circulate in the global economy. The dollar and the yen have been around for a long time. The euro was created in the 1990s. In October 2000, one U.S. dollar bought 1.17 euros. From 2000 through 2008, the dollar sank against the euro and by July 2008 one U.S. dollar bought only 0.63 euros. Why do currency exchange rates fluctuate? The U.S. economy has become attractive to foreign investors. What determines the amount of international borrowing and lending? dolar Euro neye göre artar azalır? neden?
Foreign Exchange Market
To buy goods and services produced in another country we need money of that country. Foreign bank notes, coins, and bank deposits are called foreign currency. We get foreign currency in the foreign exchange market.
Foreign Exchange Market
The Foreign Exchange Market We get foreign currency and foreigners get U.S dollars in the foreign exchange market. The foreign exchange market is the market in which the currency of one country is exchanged for the currency of another.
Foreign Exchange Market
Exchange Rates The price at which one currency exchanges for another is called a foreign exchange rate. (example 84 yen per US dollar) A fall in the value of one currency in terms of another currency is called currency depreciation.
A rise in value of one currency in terms of another currency is called currency appreciation.
1 $ = 0.76 Euro 1 yil sonra 1$= 0.98 olursa. $'in degerini artiriyor. olusan dlagnalanmaya bakmak iyi olur
Foreign Exchange Market
Nominal and Real Exchange Rates The nominal exchange rate is the value of the U.S. dollar expressed in units of foreign currency per U.S. dollar. It is a measure of how
Chapter 9 – The Exchange Rate and the Balance of Payments
Catia Cialani-cci@du.se
Some questions to be answered…
The dollar, the yen, and the euro are three of the world’s monies. But they are among more than 100 different monies that circulate in the global economy. The dollar and the yen have been around for a long time. The euro was created in the 1990s. In October 2000, one U.S. dollar bought 1.17 euros. From 2000 through 2008, the dollar sank against the euro and by July 2008 one U.S. dollar bought only 0.63 euros. Why do currency exchange rates fluctuate? The U.S. economy has become attractive to foreign investors. What determines the amount of international borrowing and lending? dolar Euro neye göre artar azalır? neden?
Foreign Exchange Market
To buy goods and services produced in another country we need money of that country. Foreign bank notes, coins, and bank deposits are called foreign currency. We get foreign currency in the foreign exchange market.
Foreign Exchange Market
The Foreign Exchange Market We get foreign currency and foreigners get U.S dollars in the foreign exchange market. The foreign exchange market is the market in which the currency of one country is exchanged for the currency of another.
Foreign Exchange Market
Exchange Rates The price at which one currency exchanges for another is called a foreign exchange rate. (example 84 yen per US dollar) A fall in the value of one currency in terms of another currency is called currency depreciation.
A rise in value of one currency in terms of another currency is called currency appreciation.
1 $ = 0.76 Euro 1 yil sonra 1$= 0.98 olursa. $'in degerini artiriyor. olusan dlagnalanmaya bakmak iyi olur
Foreign Exchange Market
Nominal and Real Exchange Rates The nominal exchange rate is the value of the U.S. dollar expressed in units of foreign currency per U.S. dollar. It is a measure of how