TAILIEUCHUNG - Lecture Multinational financial management: Chapter 2 - Ngo Thi Ngoc Huyen

Lecture Chapter 2 "The determination of exchange rates" introduce to you the content: Exchange rate equilibrium, the fundamental of Central bank intervention. Invite you to consult. | CHAPTER TWO 10 5 2015 THE DETERMINATION OF EXCHANGE RATES CHAPTER 2 CHAPTER OVERVIEW Exchange rate equilibrium The fundamental of Central bank intervention 10 5 2015 CHAPTER 2 DEMAND FOR A CURRENCY . VIEWPOINT Demand for foreign exchange by . coiporations traders governments that need to purchase foreign-produced trade items foreign assets real and financial . Demand Curve Relationship between the quantity of FX demanded the price of FX exchange rate Negatively sloping o m Price of BP in RVE FOR BRITISH POUNDS 10 5 2015 10 Bill 20 Bill Quantity of BP CHAPTER 2 4 1 SUPPLY FOR A CURRENCY . VIEWPOINT Supply of foreign exchange by foreign corporations traders governments that need to purchase . -produced trade items . assets real and financial . Supply Curve Relationship between the quantity of FX demanded the price of FX exchange rate Positively sloping SUPPLY c SL9 c ằ o u J Cl URVE OR BRITISH POUNDS 10 5 2015 10 Bill 20 Bill Quantity of BP CHAPTER 2 6 ỈATE EQUILIBRIUM . VIEW POINT Equilibrium dollar price and quantity of British Pounds are determined such that American and British goods and assets are traded. Quantity of BP 10 5 2015 CHAPTER 2 FACTORS EXCHANGE RATE EVENTS Increase decrease in relative domestic inflation Increase decrease in relative domestic interest rates Increase decrease in relative GDP FX trading by Governments FX trading by speculators due to change in expectations EFFECTS What happen to The supply and demand schedules The equilibrium exchange rate price of the foreign currency 2 RELATIVE DOMESTIC INFLATION INCREASE IN THE FX MARKET Demand Schedule Foreign goods are relatively cheaper to domestic consumers. Merchandise imports increase. Quantity of FX demanded at each exchange rate increases. Supply Schedule Domestic goods are relatively expensive for foreign consumers. Merchandise exports decrease. Quantity of FX supplied at each exchange rate ER falls. Equilibrium ER price of BP increases Quantity of BP Exchanged 10 5 .

• Tài chính doanh nghiệp
• The determination of exchange rates
• Exchange rates
• Exchange rate equilibrium
• Fundamental of Central bank
• Central bank intervention
• Demand Curve
• Lecture International Economics
• Bài giảng Kinh tế quốc tế
• Exchange rate determination
• Market expectations
• Inflation rates
• International financial management
• Quản lý tài chính quốc tế
• Lecture International financial management
• Bài giảng International financial management
• Tài chính quốc tế
• The fundamental of Central bank intervention
• Trade deficits
• International trade
• Wage determination
• Antitrust policy
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• Model evaluation and testing
• Consumption and saving
• Interest rates
• Lecture Economics
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• Perfectly inelastic demand
• Unitary elastic demand curve
• Market supply and demand
• Law of demand
• Negative slope
• Demand schedule
• Economic principles
• Economic policies
• Market equilibrium
• Environmental economics
• Aggregate demand
• Aggregate supply
• Aggregate demand curve
• Classical economists
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• Lecture Principles of economics
• Market imperfections
• The international economy
• Supply curve
• Lecture Managerial economics
• Managerial economics
• Demand and Supply
• Lecture Money and Banking
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• Money and Banking
• The aggregate demand curve
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• The monetary policy reaction curve
• Markets in action
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• Long run real interest rate
• Lecture Macroeconomics
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• Economic theory
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• The behavior of consumers
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• The aggregate demand and supply model
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• Applying the IS LM Model
• IS LM theory
• Lecture Economics for Managers
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• Aggregate Supply and Demand
• The Keynesian revolution
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• Quantity demanded