Exchange rate determination - calculation
Syllabus: Calculate the value of one currency in terms of another currency.
Syllabus: Calculate the exchange rate for linear demand and supply functions.
Syllabus: Plot demand and supply curves for a currency from linear functions and identify the equilibrium exchange rate.
Syllabus: Using exchange rates, calculate the price of a good in different currencies.
For higher level, you need to be able
to understand how to calculate the equilibrium exchange rate in a
market. You will need to calculate this from linear demand and supply
functions and to be able to plot the demand and supply curves for
foreign exchange. You will also need to be able to calculate exchange
rates and the prices of goods in other currencies. The presentation
below goes through this. Click on the screenshot, or link below, to
open the presentation. It will open in a new web window.
You will need a headset or speakers to listen to the explanation. NB If
the video does not work it is more than likely the browser so
open using a different browser.