Nov 08 2007

IB – Theories of Exchange Rates

The links below will take you to an overview of several theories relating to exchange rates. These include:

Your assignment in today’s class is to work with your partner to read and prepare a short presentation of your assigned topic. You will come to the front and explain your topic halfway through class.

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About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

3 responses so far

3 Responses to “IB – Theories of Exchange Rates”

  1. Julietta Ohlemacheron 30 Nov 1999 at 1:00 am

    Dim Sum at Fook Lam

    Beggars Chicken and Peking Duck at Peking Garden (in Pacific Place)

    Wonton Noodles at Tsim Chai Kee 98 Wellington St

    Snacks at any Tsui Wah

    Take the tram through Wan Chai

    Seafood on Lamma Island

  2. Lucas Topham / Carloon 13 Nov 2007 at 11:53 am

    Economic Effects of a Devaluation:

    The economic effects of a devaluation will affect all consumers and producers involved with international trade. There will be an decrease in consumption of imported goods, and this will negatively affect foreign exporters because there will be a decrease in consumption of their goods therefore less revenue. The consumption of imported goods will decrease because they will seem relatively more expensive.

    There will be more exports from domestic producers to foreign countries because the goods seem relatively cheaper to foreign countries. This increase in foreign consumption will increase domestic GDP. Also because of the increase in exports to foreign countries, there will be an increase in employment in the export industries in order to meet the new demand. The lower exchange rate will also increase the employment in domestic industries because domestic consumers will have more incentive to buy domestic goods because foreign imports are relatively more expensive.

    Inflation will rise because the price level of goods will rise. The price level rises because domestic firms need to import relatively more expensive resources. The increase in resource costs will require firms to raise their price in order to continue making profit.

  3. videncia personalon 20 Aug 2015 at 2:35 pm

    videncia personal

    IB – Theories of Exchange Rates | Economics in Plain English