HIS109Y1 Lecture Notes - Lecture 17: Demand Shock, Foreign Exchange Market, Capital Account
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Exchange rates and payments with the rest of the world. If c. 00 = ussh. 90, reciprocal exchange rate is us. 00 = 1 / 0. 90 = c. 11: when c$ appreciates against my currency, that currency depreciates against c$, and vice versa. E(cid:454)plai(cid:374) (cid:449)h(cid:455) the title of the se(cid:272)tio(cid:374), (cid:862)ho(cid:449) (cid:373)u(cid:272)h does that dollar (cid:272)ost? (cid:863) is (cid:374)ot sill(cid:455) at all. You buy and sell canadian dollars on the foreign exchange market. The exchange rate is the price of the. If the exchange rate for the canadian dollar in terms of u. s. dollars is us$ 0. 95, that means it takes 95 cents u. s. to buy 1 canadian dollar. In your own words, explain what a reciprocal relationship is. When you convert canadian dollars into u. s. dollars, there is an exchange rate that tells you how many u. s. dollars you get for each canadian dollar. Suppose that exchange rate is 1 canadian dollar = ussh. 63.
