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

Fixed exchange rates

Syllabus: Describe a fixed exchange rate system involving commitment to a single fixed rate.

Definition: A Fixed Exchange Rate System is a system in which the value of a country´s currency, in relation to the value of another country (or countries) currency is maintained at a constant conversion rate through government (central bank) intervention. It can also be called a pegged exchange rate and is the opposite of a flaoting exchange rate system. Read more: http://www.businessdictionary.com/definition/fixed-exchange-rate.html#ixzz4Dd7AaOcy

NB. If the government (central bank) decide to lower the exchange rate in a fixed exchange rate system this is called a DEVALUATION (depreciation in a floating exchange rate system) and if the exchange rate is raised this is a REVALUATION (appreciation in floating system)

Syllabus: Explain, using a diagram, how a fixed exchange rate is maintained.

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• Fixed exchange rate - equilibrium above fixed rate

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• Fixed exchange rate - equilibrium below fixed rate