chapter 10 exchange rates and exchange rate systems

Chapter 10 Exchange Rates and Exchange Rate Systems

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Chapter 10

Exchange Rates and Exchange Rate Systems

Examples of Exchange Rates

Page 3: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.1 The Demand Curve for Foreign Exchange

Page 4: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.2 The Supply of Foreign Exchange

Page 5: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.3 Supply and Demand in the Foreign Exchange Market

Page 6: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.4 An Increase in Demand for British Pounds

Page 7: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.5 An Increase in the Supply of British Pounds

Page 8: Chapter 10 Exchange Rates and Exchange Rate Systems

Exchange Rates in the Long Run: Purchasing Power Parity

• Purchasing power parity: the equilibrium value of an exchange rate is at the level that allows a given amount of money to buy the same quantity of goods abroad as it will buy at home

Page 9: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.6 The Effects of an Increase in Home’s Interest Rate

Page 10: Chapter 10 Exchange Rates and Exchange Rate Systems

Determinants of an Exchange Rate: Summary

Page 11: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.7 Fixed Exchange Rates and Changes in Demand

Page 12: Chapter 10 Exchange Rates and Exchange Rate Systems

FIGURE 10.8 Selling Reserves of Pounds to Counter a Weakening Dollar

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chapter 10 exchange rates and exchange rate systems

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