13 The Importance of Exchange Rates When a country's currency appreciates (rises in value relative to other currencies), the country's goods abroad become more expensive and foreign goods in that country become cheaper(holding domestic prices constant in the two countries). Conversely when a country's currency depreciates, its goods abroad become cheaper and foreign goods in that country become more expensive
1.3 The Importance of Exchange Rates When a country’s currency appreciates (rises in value relative to other currencies), the country’s goods abroad become more expensive and foreign goods in that country become cheaper (holding domestic prices constant in the two countries). Conversely, when a country’s currency depreciates, its goods abroad become cheaper and foreign goods in that country become more expensive
1 3 The Importance of Exchange Rates ◆某国货币升值时(相对其他货币价值上 升),该国商品在国外会变贵,而外国商 品在本国则会变便宜(假设两个国内价格 保持不变);相反,当某国货币贬值时, 该国商品在国外将变得更便宜,而外国商 品在本国将变贵
1.3 The Importance of Exchange Rates 某国货币升值时（相对其他货币价值上 升），该国商品在国外会变贵，而外国商 品在本国则会变便宜（假设两个国内价格 保持不变）；相反，当某国货币贬值时， 该国商品在国外将变得更便宜，而外国商 品在本国将变贵
Exchange rates 1990-2002 1.00 2.00 0.90 180 British pound 0.80 Canadian dollar 1.60 0.70 140 0.60 120 0.50 100 1990 2000 1990 2000 0.012 1.20 0.011 1.10 Japanese yen Euro 0.010 100 0.009 0.90 0.008 0.80 0.007 0.70 0.006 0.60 1990 2000 1990 2000
Exchange rates 1990-2002
1. 3 The Importance of Exchange Rates The effect of appreciation or depreciation of a currency For an individual (consumer) For an export corporation
1.3 The Importance of Exchange Rates The effect of appreciation or depreciation of a currency For an individual (consumer) For an export corporation