Академический Документы
Профессиональный Документы
Культура Документы
!"#
$
!%!!
O The demand curve for pounds is negatively sloped, and the supply
curve of pounds is positively sloped.
O The demand for pounds is D. It represents the sum of transactions
giving rise to receipts of foreign exchange. When the exchange rate is
e0 the quantity of pounds demanded is q0.
O A depreciation of the pound is indicated by a fall in the exchange rate to
e1; foreign demand for UK goods and assets rises, and hence the
quantity of pounds demanded also rises, from q0 to q1.
O An appreciation has the opposite effect; a rise in the exchange rate from
e1 to e0 causes the quantity of pounds demanded to fall from q1 to q0.
O The supply of pounds is given by line S. It represents the sum of
transactions that require payments of foreign exchange. When the
exchange rate is e0 the quantity of pounds supplied is q2.
O If the exchange rate falls to e1, UK demand for foreign goods and assets
falls, and hence the quantity of pounds supplied also falls, from q2 to q3.
O An appreciation has the opposite effect; a rise in the exchange rate from
e1 to e0 causes the quantity of pounds supplied to rise from q3 to q2.
!" $