EconomicsCode 9708
Exchange rates
What this topic asks you to be able to do
- definition of exchange rate
- how a floating exchange rate is determined
- a floating exchange rate losing value (depreciation) compared with gaining value (appreciation)
- what drives movements in a floating exchange rate: the demand for and the supply of the currency
- an AD/AS analysis of how exchange rate changes affect equilibrium national income in the domestic economy, and the level of real output, the price level and employment