Using a diagram, explain how an economy's exchange rate is determined. 4 marks. AS Level The National and International Economy

The main part of the explanation will be through the use of the whiteboard during the session.
An economy's exchange rate is determined by the demand and supply of its currency. The point at which the demand curve and supply curve intersect on the diagram represents the equilibrium exchange rate and so the price of the currency and the quantity of the currency; on the vertical and horizontal axes in each case. Both the supply of and demand for the currency determine the exchange rate.

JM
Answered by Jenny M. Economics tutor

2417 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is the likely effect of Brexit on the UK economy?


Why is supply side policy used a lot in modern economies?


When answering my essay question, what could be the key evaluative points when talking about fiscal policy?


State and explain two ways in which domestic fuel consumption gives rise to negative externalities.


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences