Subject category:
Strategy and General Management
Published by:
Darden Business Publishing
Version: 03.2004
Length: 6 pages
Topics:
Exhange rate risk; Inflation
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Abstract
This note defines exchange rates and explains changes in exchange rates (appreciations and depreciations). The note also introduces the concept of the real exchange rate as an inflation adjusted measure of the purchasing power of a country''s currency and as a measure of the competitiveness of a country''s products. The note discusses factors that influence the real exchange rate. The note contains assignment questions.
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Abstract
This note defines exchange rates and explains changes in exchange rates (appreciations and depreciations). The note also introduces the concept of the real exchange rate as an inflation adjusted measure of the purchasing power of a country''s currency and as a measure of the competitiveness of a country''s products. The note discusses factors that influence the real exchange rate. The note contains assignment questions.