ECON102 Lecture Notes - Lecture 12: Canadian Dollar, Foreign Exchange Market, Economic Equilibrium
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ECON102 Full Course Notes
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Econ 102 - lecture 12 - the exchange rate. To buy goods and services produced in another country we need money of that country. Foreign bank notes, coins and bank deposits are called foreign currency. The foreign exchange market is the market in which the currency of one country is exchanged for the currency of another. Foreign exchange rate is the price at which one currency exchanges for another. Determined in a market - the foreign exchange market. Many traders and no restrictions, the foreign exchange market is a competitive market. Currency depreciation: a fall in the value of one currency in terms of another currency. Currency appreciation: a rise in value of one currency in terms of another currency. The quantity of canadian dollars that traders plan to buy in the foreign exchange market during a given period depends on : exchange rate, world demand for canadian exports.