A selection of revision notes on exchange rates

The gyrations of currency values in international markets can have far-reaching consequences for short term growth, inflation, employment and living standards. Exchange rates figures in both the AS and A2 macroeconomic syllabus and we have blogged about them extensively over the last year. this blog brings together a selection of articles and presentations that we hope students will find useful in their exam preparation for June 2010.

AS macroeconomics syllabus

* Students should know that monetary policy can involve the use of interest rates, the money supply and exchange rates.
* They should understand how the Monetary Policy Committee (MPC) of the Bank of England uses interest rates to achieve the government’s target rate of inflation.
* There should be an understanding that changes in the exchange rate can affect the prices of exports and imports, the level of domestic economic activity, as well as the balance of payments on current account

A2 macroeconomics syllabus

* Students should understand the relationship between interest rates and the exchange rate and how the exchange rate might be an influence on policy objectives such as price stability and unemployment.
* Students should understand how exchange rates are determined in both fixed and floating exchange rate systems (whether completely free or managed periodically by the authorities).
* Students should be able to evaluate these exchange rate systems and have an understanding of their implications for the management of the domestic economy

Select from our recent blogs by choosing from the listing below the label “related entries”