29/09/15
Lesson 1: Exchange rates
Learning Objective: I can define, explain, and give examples of an exchange rate.
DA: List at least two factors which you think determine the value of a currency.
Activity-Create a poster of 20 different currencies and there values expressed in terms of another.
Currencies are exchanged (traded) on the foreign exchange market.
DA: List at least two factors which you think determine the value of a currency.
Activity-Create a poster of 20 different currencies and there values expressed in terms of another.
Currencies are exchanged (traded) on the foreign exchange market.
- Governments
- Central banks
- Private commercial banks
- MNCs and other financial institutions
- Fixed
- Floating
- Managed
- Maintaining the fixed value is usually carried out by the government/central bank.
- Raised=Revaluation
- Lowered=Devaluation
Ex-Barbadian $ has been fixed against the US dollar at a rate of 2Bds$=1US$
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Activity/HW: Identify a country which uses a fixed exchange rate regime and an example of when the government intervened to either revaluate or devaluate the currency.
Countries with fixed exchange rate:
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Government actions to manipulate the currency and maintain its desired value:
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