International economics

Table of Contents

1. Topic pack - International economics - introduction
2. Section 3.1 International trade (notes)
3. Section 3.1 International trade (questions)
4. Section 3.1 International trade - simulations and activities
5. Section 3.2 Exchange rates (notes)
   1. Exchange rates - introduction
   2. Floating exchange rates
   3. Demand and supply of dollars (video)
   4. Exchange rate appreciation
   5. Exchange rate depreciation
   6. Demand and supply of dollars (video)
   7. Advantages and disadvantages of floating exchange rates
   8. Exchange rate determination - calculation
   9. Causes of changes in exchange rate
   10. Effects of exchange rate changes
   11. Fixed exchange rates
   12. Advantages and disadvantages of fixed exchange rates
   13. Managed exchange rates
6. Section 3.2 Exchange rates - questions
7. Section 3.2 Exchange rates - simulations and activities
8. Section 3.3 Balance of payments - notes
9. Section 3.3 Balance of payments - questions
10. Section 3.4 Economic integration - notes
11. Section 3.4 Economic integration - questions
12. Section 3.5 Terms of trade - notes
13. Section 3.5 Terms of trade - questions
14. Print View

Freely Floating exchange rate system

Example of a definition question:

Paper 3 2016
(a) Define the term freely floating exchange rate system. [2 Marks]

Marking levels:

The work does not reach a standard described by the descriptors below.    [0 Marks]

Vague definition. The idea that the exchange rate fluctuates / changes.    [1 Mark]

Accurate definition. An explanation that the determination of the exchange rate depends on market forces (D and S). [2 Marks]

Definition: A freely floating exchange rate (ER) system is when the ER is determined only by supply and demand for the currency and there is no government intervention in the currency market.

Syllabus: Explain that the value of an exchange rate in a floating system is determined by the demand for, and supply of, a currency

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• Exchange rate equilibrium