Exchange rates

Question 1

What is an exchange rate?

Answer 1

An exchange rate is how much it costs to EXCHANGE one currency for another.

Question 2

\What are the major trading partners or Australia?

Answer 2

China
USA
Japan
South Korea

Question 3

Why do exchange rates matter?

Answer 3

Overseas, people want to be paid in their own currency.
Foreign investors must use the currency of the nation they are investing in.

Question 4

Appreciate meaning?

Answer 4

When a dollar is in high demand. Worth more, can buy more.

Question 5

Depreciate meaning?

Answer 5

When a dollar is in low demand. Can buy less with the dollar
Also imports are cheaper and exporting is expensive.

Question 6

What does trade deficit mean?

Answer 6

Trade deficit means that there are more imports more than exports.

Question 7

What is Protectionism?

Answer 7

Government policies that restrict international trading to help their own domestic industries. Usually implemented to improve the economic activity within domestic.

Question 8

What factors influence exchange rates?

Answer 8

Government Intervention
Inflation
Interest Rates
Current account deficits
Government debts
Speculation

Question 9

What is speculation?

Answer 9

Basically people invest in money, they buy the currencies when it is lower valued, and hope to sell it when it is higher in value.