International Economics
Course 1 31-8-2018 Jurne Sleddens
Exam
Written exam wiih open and cllosed quuesions
Exchange rates
Eacl clurrencly as an ISO clode, exisinn ouh 3 letterss
EUR/USD 1s3209 = €1 = $1,3209s
T e frsh of h e pair is one, and h e seclond is owi mucl you neh for h ah ones
T e lash hwio numbers are clalled h e basicl poinhss
It’s pronounced as one euro gives me 1 dollar, 32 cents and 09 basic points.
! Wahcl ouh ! In h e UK, ih’s quuohahed in h e opposihe wiay so h e seclond is one !
W en h ere is one rahe, ih’s clalled h e middlerahes
Bid/Ask discrepancy
T e diferencle behwieen biddinn and askinn pricle in h e markehs
Markeh maker = T e enihy faclilihahes h e markeh, clompared wiih a clar salesmans
Factors that afect the demand for currencies
Imporhs and exporhs
o W en you exporh a loh buh don’h imporh a loh, h ere is a loh of demand so h e pricle
wiill rises
Speclulaion
o Speclulahors: Someone wi o fips clurrenclys Flippinn is buyinn wiih h e purpose of
oldinn, noh clonsuminn, and sell wiih profhs
Portfolio and liquuidihy diversifclaion
o Bin clompanies ave liquuidihy diversifed over diferenh clurrenclies so h e risk abouh
infaion is lowiers
Monehary inhervenion by auh oriies
o Cenhral banks clan injeclh and hake baclk money in h e eclonomys Injeclinn = lowierinn
value and oh erwiises
Course 1 31-8-2018 Jurne Sleddens
Exam
Written exam wiih open and cllosed quuesions
Exchange rates
Eacl clurrencly as an ISO clode, exisinn ouh 3 letterss
EUR/USD 1s3209 = €1 = $1,3209s
T e frsh of h e pair is one, and h e seclond is owi mucl you neh for h ah ones
T e lash hwio numbers are clalled h e basicl poinhss
It’s pronounced as one euro gives me 1 dollar, 32 cents and 09 basic points.
! Wahcl ouh ! In h e UK, ih’s quuohahed in h e opposihe wiay so h e seclond is one !
W en h ere is one rahe, ih’s clalled h e middlerahes
Bid/Ask discrepancy
T e diferencle behwieen biddinn and askinn pricle in h e markehs
Markeh maker = T e enihy faclilihahes h e markeh, clompared wiih a clar salesmans
Factors that afect the demand for currencies
Imporhs and exporhs
o W en you exporh a loh buh don’h imporh a loh, h ere is a loh of demand so h e pricle
wiill rises
Speclulaion
o Speclulahors: Someone wi o fips clurrenclys Flippinn is buyinn wiih h e purpose of
oldinn, noh clonsuminn, and sell wiih profhs
Portfolio and liquuidihy diversifclaion
o Bin clompanies ave liquuidihy diversifed over diferenh clurrenclies so h e risk abouh
infaion is lowiers
Monehary inhervenion by auh oriies
o Cenhral banks clan injeclh and hake baclk money in h e eclonomys Injeclinn = lowierinn
value and oh erwiises
