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Appreciation - Term Papers

Appreciation

• The impact of an appreciation depends upon the price elasticity of demand for exports and imports. For example, if demand for UK exports is price inelastic (because of few alternatives) then there will only be a small fall in demand.

• The impact of an appreciation depends on the situation of the economy. If the economy is in a recession, then an appreciation will cause a significant fall in aggregate demand, and will probably contribute to higher unemployment. However, if the economy is in a boom, then an appreciation will help reduce inflationary pressures and limit the growth rate.

• It also depends why the exchange rate is increasing in value. If there is an appreciation because ...

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Appreciation. (2014, January 27). Retrieved November 22, 2024, from http://www.essayworld.com/essays/Appreciation/103605

"Appreciation." Essayworld.com. Essayworld.com, 27 Jan. 2014. Web. 22 Nov. 2024. <http://www.essayworld.com/essays/Appreciation/103605>

"Appreciation." Essayworld.com. January 27, 2014. Accessed November 22, 2024. http://www.essayworld.com/essays/Appreciation/103605.

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PAPER DETAILS

Added: 1/27/2014 05:35:46 PM
Submitted By: mehakm
Category: Economics
Type: Free Paper
Words: 155
Pages: 1

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