国际财务管理第六版中文版第二章.pptVIP

Fixed versus Flexible Exchange Rate Regimes S D Q of ￡ Dollar price per ￡ (exchange rate) $1.40 Trade deficit Demand (D) Supply (S) Flexible Exchange Rate Regimes Under a flexible exchange rate regime, the dollar will simply depreciate to $1.60/￡, the price at which supply equals demand and the trade deficit disappears. Fixed versus Flexible Exchange Rate Regimes Supply (S) Demand (D) Demand (D*) D = S Dollar depreciates (flexible regime) Q of ￡ Dollar price per ￡ (exchange rate) $1.60 $1.40 Fixed versus Flexible Exchange Rate Regimes Instead, suppose the exchange rate is “fixed” at $1.40/￡, and thus the imbalance between supply and demand cannot be eliminated by a price change. The government would have to shift the demand curve from D to D* In this example this corresponds to contractionary monetary and fiscal policies. Fixed versus Flexible Exchange Rate Regimes Supply (S) Demand (D) Demand (D*) D* = S Contractionary policies (fixed regime) Q of ￡ Dollar price per ￡ (exchange rate) $1.40 End Chapter Two * * Cyprus, Denmark, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, Sweden and the United Kingdom are members of the EU but are not currently participating in the single currency. Denmark is a member of the Exchange Rate Mechanism II (ERM II). This means that the Danish krone is linked to the euro, but the exchange rate is not fixed. This map is used with permission Copyright ? 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 2-* 国际财务管理 EUN / RESNICK Sixth Edition INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Fourth Edition Chapter Objective: This chapter serves to introduce the student to the institutional framework within which: International payments are made. The movement of capital is accommodated. Exchange rates are determined. 2 Chapter Two The International Monetary System Evolution of the International Monetary System Current Exchange Rate Arrangements European Monetary System Eu