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When Might It Be Important to Know A Currency S Exchange Rate When Planning Expenses For An Overseas Trip When Changing Money into Smaller Denominations When Preparing to Buy Something Expen

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What is the importance of currency?

It is important because the exchange rate, the price of one currency in terms of another, helps to determine a nation's economic health and hence the well-being of all the people residing in it.

Why must old currency be taken out of circulation when new currency is made?

Why must old currency be taken out of circulation when new currency is made? The old currency is more valuable than the new currency. The new currency is much more liquid than the old currency. Too much currency in an economic system will cause inflation.

When might it be important to know a currency's exchange rate?

When might it be important to know a currency's exchange rate? When planning expenses for an overseas trip when changing money into smaller denominations when preparing to buy something expensive when deciding which college is the best value.

What does an exchange rate tell you Quizlet?

A) Nominal exchange rates tell you how many, say, euros you will receive in exchange for a U.S. dollar, but they do not tell you how much of another country's goods and services you can buy with that U.S. dollar. Suppose that the euro rises in value relative to the dollar.

What determines the exchange rate?

If a currency is free-floating, its exchange rate is allowed to vary against that of other currencies and is determined by the market forces of supply and demand. Exchange rates for such currencies are likely to change almost constantly as quoted on financial markets, mainly by banks, around the world.

What might cause a change in the value of fiat money?

What might cause a change in the value of fiat money? A change in the value of commodities. A change in government regulations. A change in materials used to make money.

What may cause a change in the value of fiat money?

Fiat money is at risk of inflation and deflation because its value is not intrinsic. Commodity money has intrinsic value but risks large price fluctuations based on changing commodity prices. If silver coins are used, a large discovery of silver may cause the value of the silver currency to plunge.

What might cause a change in the value of money?

Supply and demand of currency in the international market effects currency value. So high demand and high exports exists in the economy side-by-side. High demand causes high inflation and high exports can cause high demand for currency. So currency value can come down at the same time to up, which is the ideal case.

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