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Econ

Published on Nov 25, 2015

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PRESENTATION OUTLINE

LEYA FRANCISCO ALEX

  • Exchange Rate
  • Appreciation vs. depreciation
  • Balance of Trade

EXCHANGE RATE

  • The value of one currency for the purpose to another
  • Direct Quotation: price of a unit of foreign currency expressed in terms of the domestic currency
  • Indirect Quotation: price of a unit of domestic currency expressed in terms of the foreign currency

EXCHANGE RATE CONT.

  • Exchange rate has a base currency & counter currency
  • Direct Quotation: foreign currency is the base currency & domestic currency is the counter currency
  • Indirect Quotation: the domestic currency is the base currency & foreign currency is the counter currency

APPRECIATION VS. DEPRECIATION

  • Appreciation: the value goes up
  • Depreciation: the value goes down

BALANCE OF TRADE

  • Trade surplus, more exported than imported
  • Trade deficit, importing more than is exported

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