Introduction
Economics is defined as “a study which its scope of influence comprises large number of activities.” The study has two sub divisions namely micro economics and macro economics. Micro economics is the methods through which things takes place within the system, it deals in the very micro level. The main focus of micro economics is on theories, mainly regarding behavioral patterns. Its major concern is on how things should function perfectly. For instance, Demand and supply relationship, Consumer behavior theory, pricing theory .etc. Macro economics on the contrary, considers the broader aspects/features of an economy as a whole rather than taking individual markets, taking into consideration facts and figures for study. The term …show more content…
The extent to which the fluctuations have occurred is that they have moved in the range of 15% to 20% within a week. The fluctuations have been mostly in the developing countries where the exchange rates have moved by more than 20% within duration of 2-3 weeks. Each and Every activity in this world is interconnected, as we are aware that the world itself is a global village. In today’s world of growth and development, there is no country that is deprived of international trade. Consequently, if international trade exists there shall be evident effects in trade and commerce of the respective countries. Because of this most of the developing countries which suffered the exchange rate movement, had to face a significant fall in their GDP figures. Also the companies situated in those countries reported losses during the fluctuations either due to gain or loss in the exchange …show more content…
When there was an economic slowdown in the past, few developed country governments in order to introduce more funds and control deflationary movement into the market, they issued bonds. The year scheduled to recall the bonds was the present year, which will result into outflow of money from individual investors to the government. Following which the investments held around the world were liquidated and thus, economic conditions and money supply of those countries experienced a fall, causing depreciation in base currency’s value and simultaneous rise in the exchange rate.
Conclusion
The issues discussed above were the vital and significant causes for sudden movement in the exchange rates throughout the world. Since then, the governments of all the countries have taken a large number of methods to control them and the exchange rate is now within the sizeable limits.
References;
Obstfeld, M., Rogoff, K. S., & Wren-lewis, S. (1996). Foundations of international macroeconomics (Vol. 30). Cambridge, MA: MIT
Economics is defined as “a study which its scope of influence comprises large number of activities.” The study has two sub divisions namely micro economics and macro economics. Micro economics is the methods through which things takes place within the system, it deals in the very micro level. The main focus of micro economics is on theories, mainly regarding behavioral patterns. Its major concern is on how things should function perfectly. For instance, Demand and supply relationship, Consumer behavior theory, pricing theory .etc. Macro economics on the contrary, considers the broader aspects/features of an economy as a whole rather than taking individual markets, taking into consideration facts and figures for study. The term …show more content…
The extent to which the fluctuations have occurred is that they have moved in the range of 15% to 20% within a week. The fluctuations have been mostly in the developing countries where the exchange rates have moved by more than 20% within duration of 2-3 weeks. Each and Every activity in this world is interconnected, as we are aware that the world itself is a global village. In today’s world of growth and development, there is no country that is deprived of international trade. Consequently, if international trade exists there shall be evident effects in trade and commerce of the respective countries. Because of this most of the developing countries which suffered the exchange rate movement, had to face a significant fall in their GDP figures. Also the companies situated in those countries reported losses during the fluctuations either due to gain or loss in the exchange …show more content…
When there was an economic slowdown in the past, few developed country governments in order to introduce more funds and control deflationary movement into the market, they issued bonds. The year scheduled to recall the bonds was the present year, which will result into outflow of money from individual investors to the government. Following which the investments held around the world were liquidated and thus, economic conditions and money supply of those countries experienced a fall, causing depreciation in base currency’s value and simultaneous rise in the exchange rate.
Conclusion
The issues discussed above were the vital and significant causes for sudden movement in the exchange rates throughout the world. Since then, the governments of all the countries have taken a large number of methods to control them and the exchange rate is now within the sizeable limits.
References;
Obstfeld, M., Rogoff, K. S., & Wren-lewis, S. (1996). Foundations of international macroeconomics (Vol. 30). Cambridge, MA: MIT