Why can exchange rates be very volatile?
What will be an ideal response?
Exchange rates can be volatile because in the foreign exchange market the factors that affect the supply also affect the demand and they reinforce each other. For instance, an increase in demand (which raises the exchange rate) often is accompanied by a decrease in the supply (which also raises the exchange rate). As a result, the exchange rate soars higher.
Economics
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A financial institution that accepts deposits and makes loans is generally referred to as a(n)
A) central bank. B) commercial bank. C) monetary authority. D) investment bank.
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When voluntary exchange takes place, both parties gain from the exchange
Indicate whether the statement is true or false
Economics