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Inflation Effects on Exchange Rates

Inflation Effects on Exchange Rates 



1.	Percentage Depreciation. Assume the spot rate of the British pound is $1.73.  The expected spot rate one year from now is assumed to be $1.66.  What percentage depreciation does this reflect?

2.	Inflation Effects on Exchange Rates . Assume that the U.S. inflation rate becomes high relative to Canadian inflation.  Other things being equal, how should this affect the (a) U.S. demand for Canadian dollars, (b) supply of Canadian dollars for sale, and (c) equilibrium value of the Canadian dollar?




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13 Apr 2016

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    Inflation Effects on Exchange Rates

    Inflation Effects on Exchange Rates Inflation Effects on Exchang ****** ******
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