Question
Explain the factors that affect the determination of an exchange rate between two countries: e = percentage change in the spot price INF = change
Explain the factors that affect the determination of an exchange rate between two countries:
e = percentage change in the spot price
INF = change in the difference between home and inflation in a foreign country
INT = change in the difference between the home interest rate and the interest rate in the foreign country
INC = change in the difference between the level of home income and the level of foreign country income
GC =The change in government controls
EXP changes the outlook for future exchange rates
- Provide real life example (2019) for each one such as what going on in lebanon, zimbabwe, or venezuela. And examples of rich country & poor country for each factor.
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