The Determinants of Exchange Rates in a Floating Exchange Rate System



To understand how a country’s currency might appreciate or depreciate, you must understand the variable that can affect demand or supply for the currency on …

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The Determinants of Exchange Rates in a Floating Exchange Rate System

To understand how a country's currency might appreciate or depreciate, you must understand the variable that can affect demand or supply for the currency on the forex market. This lesson will introduce a useful acronym (TIPSY) for remembering the determinants of exchange rates, and evaluate the advantages and disadvantages of floating exchange rate systems.

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