Chapter 38: Foreign exchange rates Flashcards
1
Q
Foreign exchange rate
A
The price of one currency in terms of another currency or currencies
2
Q
Fixed exchange rate
A
An exchange rate whose value is set at a particular level in terms of another currency or currencies
3
Q
Devaluation
A
A fall in the value of a fixed exchange rate
4
Q
Revaluation
A
A rise in the value of a fixed exchange rate
5
Q
Floating exchange rate
A
An exchange rate which can change frequently as it is determined by market forces
6
Q
Appreciation
A
A rise in the value of a floating exchange rate
7
Q
Depreciation
A
A fall in the value of a floating exchange rate
8
Q
Foreign direct investment (FDI)
A
Setting up production units or buying existing production units in another country
