6. Exchange Rates and the Real Exchange Rate
Terms in this set (4)
the value of one currency for the purpose of conversion to another.
What determines exchange rate
eg; Food crisis in Asia increases the demand for the NZ dollar as Asia now has to buy food imports from NZ = Exchange Rate Increases
Nominal exchange rate
How much of one currency is necessary to acquire one unit of another.
Real exchange rate
e*P / Pf
e = nominal exchange rate
P = price in elected country
Pf = price in foreign country
OTHER SETS BY THIS CREATOR
L23 Not for profit marketing
L22 Ethical Marketing Practices
L21 Consumption and Wellbeing
L20 Retailing and Shopping
THIS SET IS OFTEN IN FOLDERS WITH...
3. Inflation & Measuring the cost of living
4. Money Inflation & Monetary System