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    When it doesn't specify what currencies it's talking about? Could someone explain please?


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    well a fall in exchange rate could lead to hot money outflow as less people want to put money in to that country's banks as money is worth less. The demand for that currency falls which leads improvement in Balance of Payments as exports cheaper and imports dearer.

    Thats all I know anyways!
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    (Original post by JodieW)
    When it doesn't specify what currencies it's talking about? Could someone explain please?


    Posted from TSR Mobile
    If there is no mention of a specific currency, then the currency must be implied, eg. an article on the BBC is clearly talking about the pound. Exchange rates are how one currency is faring compared to all others. So if the exchange rate for the pound sterling falls, then one pound is worth fewer dollars/euros/yen, etc.
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    SPICED

    Strong Pound
    Imports Cheaper
    Exports Dearer


    Strong Pound = We import more, our exports are less competitive so AD falls.
    Weak pound = Exports are competitive, AD rises.
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    (Original post by Homeboy Hotel)
    SPICED

    Strong Pound
    Imports Cheaper
    Exports Dearer


    Strong Pound = We import more, our exports are less competitive so AD falls.
    Weak pound = Exports are competitive, AD rises.
    Thanks, very useful acronym!


    Posted from TSR Mobile
 
 
 
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