1. What is a floating exchange rate system and what factors influence the level of a country’s exchange rate?

A floating exchange rate is when the price of money is determined only by demand and supply, no government intervention occurs. The factors, which influence the level of a country’s exchange rate are the demand and supply for the exchange rate, exports, imports and investment. Changes in trade flows (tourism), changes in cross-borders investment flows, speculation

Answered by Zoe G. Economics tutor

5380 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

Should the government intervene in cases of market failure?


Define the term monopoly and outline its characteristics.


Using a price ceiling diagram, analyse the impact a maximum price might have on the market for food.


Why do firms in perfect competition earn normal profit in the long run


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 2013–2024

Terms & Conditions|Privacy Policy
Cookie Preferences