ECON 1010 Lecture Notes - Lecture 12: Foreign Exchange Market, Canadian Dollar, Economic Equilibrium

89 views6 pages

Document Summary

Exchange rate is the price of the canadian dollar on the foreign exchange market. It is determined by people who go to foreign exchange who demand canadian dollar and whom supply canadian dollars. That interaction of demand and supply is what determines the foreign exchange rate. So, we will look at how demand supply determine the price in the market and the exchange rate (like i mentioned earlier) is the price of canadian dollar in the foreign exchange market. It is an equilibrium like any equilibrium in that if the price is anything other than the equilibrium, competitive forces will be set in motion and push towards that equilibrium price. Fig 9. 3 foreign exchange market for canadian dollars. Answer: people who do not have canadian dollars, foreigners, they want to buy canadian dollars or are speculators (buy low, sell high), or buy assets.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

Related Questions