HI

High Exchange Rates

Exchange rates that are relatively high compared to other currencies, leading to cheaper import prices, increased purchasing power, and enhanced efficiency of domestic producers.

Low Exchange Rates

Exchange rates that are relatively low compared to other currencies, resulting in higher employment in export nations, increased employment in domestic industries, but also potential inflation.

Reasons for Government Intervention in FOREX

Actions taken by governments to influence exchange rates, such as lowering or raising rates to impact employment or inflation, maintaining fixed rates, avoiding large fluctuations, achieving relative stability, and improving the current account deficit.

Parts of the Current Account

Components including balance of trade in goods, balance of trade in services, income, and current transfers, which measure monetary movements related to trade, services, investments, and transfers between countries.

Parts of the Capital Account

Elements like capital transfers and transactions in non-produced, nonfinancial assets, which track the movement of goods, financial assets, and rights between countries.

Parts of the Financial Account

Categories such as direct investment, portfolio investment, and reserve assets, which detail foreign investments, purchases of stocks/bonds, and holdings of foreign currencies.