ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a, b, c
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a, c, d
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b, c, d
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All above
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Detailed explanation-1: -There are four main types of exchange rate regimes: freely floating, fixed, pegged (also known as adjustable peg, crawling peg, basket peg, or target zone or bands ), and managed float.
Detailed explanation-2: -During times of high inflation, foreign goods and services become more attractive to consumers and businesses as they’re cheaper. This means that imports will increase. Consequently, this causes an increase in the currency supply in forex markets which results in a depreciated currency.
Detailed explanation-3: -The foreign demand for US gold on the other hand will not have much influence on the foreign exchange rate, this is because the currency valuation is not pegged to gold.
Detailed explanation-4: -Interest and inflation rates. Inflation is the rate at which the cost of goods and services rises over time. Current account deficits. Government debt. Terms of trade. Economic performance. Recession. Speculation. 06-Sept-2022