Exchange Rates

Question 1

What is the exchange rate?

Answer 1

the price of what you get for your $NZ

Question 2

What are you doing in the foreign exchange market?

Answer 2

You are doing a deal with someone who has foreign currency and wants $NZ

Question 3

What things make up the demand for $NZ?

Answer 3

• exports
• overseas tourists to NZ
• capital flowing into NZ

Question 4

What things make up the supply of $NZ?

Answer 4

• imports
• NZ travel overseas
• capital flows out of NZ

Question 5

What is it called when the value of the $NZ goes up?

Answer 5

appreciation

Question 6

What is it called when the value of the $NZ goes down?

Answer 6

deppreciation

Question 7

What is a devaluation?

Answer 7

this is the equivalent of a depreciation but it happens when someone is controlling the exchange rate

Question 8

What is a revaluation?

Answer 8

this is the equivalent of an appreciation but it happens when someone is controlling the exchange rate

Question 9

exporters don’t want the NZD to

Answer 9

appreciate

Question 10

tourists overseas want the NZD to

Answer 10

appreciate