ECON 102 Lecture Notes - Lecture 13: Arbitrage, General Agreement On Tariffs And Trade, North American Free Trade Agreement
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ECON 102 Full Course Notes
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Unit iv section oe 1 (lec 13: introduction. Previously: closed economy => nx = 0: lr open economy, wto, nafta, gatt, Internationalization of the us economy (see next figure) Exchange rates: nominal exchange rate (e) e = nominal exchange rate = the rate at which a person can trade the currency of one country for the currency of another. Airport foreign currency exchange (fx) terminal: from the us perspective: 1 usd = 120 yen => e = 120 yen/usd. 1 usd = 8. 25 krona => e = 8. 25 krona/usd: from the foreign countries perspective: 1 yen = 1/120 usd => e japan = 0. 0083 usd/yen = 0. 83 cents/yen. 1 krona = 1/8. 25 usd => e swdn = 0. 12 usd/krona. Currency appreciation & depreciation: e 1 = 120 yen/usd -> e2 = 150 yen/usd. Usd has appreciated : e1 = 8. 25 krona/usd -> e2= 7 krona/usd. If the chinese yuan depreciates relative to the usd.
