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6.4.2 determination of a floating exchange rate

What condition determines the equilibrium exchange rate?

A

Demand for £ < supply of £, so the market clears.

B

Demand for £ = supply of £, so the market clears.

C

Demand for £ = supply of foreign currency, so the market clears.

D

The curves cross at the equilibrium exchange rate.

6.4.2 determination of a floating exchange rate Flashcards

  1. Intl A Level
  2. /Economics
  3. /6.4.2 determination of a floating exchange rate

28 flashcards on CIE Intl A Level Economics 6.4.2 determination of a floating exchange rate: the key terms and definitions you need to recall.