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Explain why supply of a foreign …

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Explain why supply of a foreign currency rises in response to a rise in its exchange rate?

Posted by Anjali Phukan Phukan 6 years, 8 months ago

CBSE > Class 12 > Economics

2 answers

Rajat Katkani 6 years, 8 months ago

When the foreign exchange rate Rises the supply of foreign exchange also Rises as there is a direct relation existing in between then it is also as we can understand it by that when the foreign exchange rate Rises the domestic currency seems to be cheaper more cheaper for the foreigners as they can get more of it by spending less foreign exchange

K Uma Mahesh 6 years, 8 months ago

1 Appreciation of foreign currency implies depreciation of domestic currency. It induces exports frm de domestic currency.implying that de supply of foreign currency inc 2 Appreciation of foreign currency induces in de domestic economy 3 Appreciation of foreign currency inc remittances frm abroad

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