Unit 4.5 · Exchange Rates
Factors Causing Changes in Exchange Rates
AO2AO4
Syllabus Requirement
Includes trade flows, investment, interest and inflation rates, speculation, and central bank actions.
Assessment Objectives
AO2Application and Analysis
AO4Use of Appropriate Skills
Summary
This topic examines the various factors that can lead to changes in exchange rates, which are the prices at which one currency can be exchanged for another. Understanding these factors is important for analyzing how currencies fluctuate in value and the implications for international trade and investment.