Abstract
The foreign exchange rate is a price—the price at which one country’s currency exchanges on the international market for another country’s. As such, it is determined by demand and supply—the amount of that currency being wanted and the amount of it being offered for sale. Since the market is a perfect one, differences in price are eliminated quickly and easily throughout the world. The main difficulty is that the price of one currency has to be expressed in terms of the other. Thus the price of the pound sterling is about 1.50 dollars.
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© 1994 J. Harvey and Janet Johnson
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Harvey, J., Johnson, M.K. (1994). Foreign Exchange Rates. In: Modern Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-23360-1_39
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DOI: https://doi.org/10.1007/978-1-349-23360-1_39
Publisher Name: Palgrave, London
Print ISBN: 978-0-333-60835-7
Online ISBN: 978-1-349-23360-1
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