1) The document discusses direct and indirect determinations of exchange rates. Direct determinations include fixed and floating exchange rate systems. Indirect determinations involve demand and supply of foreign exchange interacting in the foreign exchange market. 2) Equilibrium exchange rate is achieved where demand for foreign exchange equals supply of foreign exchange. The exchange rate can change due to shifts in demand or supply curves. It can appreciate or depreciate based on factors like changes in tastes, relative incomes, and relative prices between countries. 3) An appreciation occurs when demand for a currency increases or supply decreases, raising its exchange rate. A depreciation is the opposite. The document provides examples of how different economic factors can cause appreciation or

1. F F F 1
11
F
11.1 F
(exchange rate) F F
F
F F F F
F F F 39 = $ 1
39 F F F 1 F
1) F F F F
F F F
2) F F F F F
F
F F F F
F F F F F
F F
2
1) (fixed exchange rate)
F
F F
2) F F (flexible or
floating exchange rate) F F
F
(flexible exchange rate)
F F F (demand for foreign exchange)
(direct determination) F F F
F
F F F F

2. F F F 2
F (indirect determinations) F F F F F
, , F F F
(exogenous variable)
:$
B
45
40 C A E D$
″
D$
′
D$
0 Q2 Q1 Q3 Q( FF F
F )
F F FF F F D$
F F F
F (move along the curve on demand curve) F F F ( D$ ) F F
F 40 = $ 1 ( F 40 F 1 F )
A F F F
F F Q1 45 = $ 1 (
F 45 F 1 F ) F F F
F Q2 F B
F F F F
F F F F
FF F F F F
F F F F
FF F
F F F
F F F F F (shift
demand curve) F F F F
F ( F F F F F F
F F F F

3. F F F 3
F F , F F F F
F , F F F
, F F F F
F FF F F ) F F F F
F F F D$ F D$
″
( F F
40 = $ 1 (shift) A E F F
F F Q1 Q3) F
F F F F ( F
F F F F F F F ,
F F F F F ,
F F F ,
F F F F F FF
F F ) F F F F F F F
F D$ F D$
′
( F F 40 = $ 1
(shift) A C F F F
F Q1 Q2)
F (supply of foreign exchange)
(direct determination) F F F
F (indirect determinations) F F F F
F ( F F F F F , F
, F F , F F
F F F F ), F F
, F F ( F
, F ) F (exogenous
variable)
F F FF F F S$
F F F
F (move along the curve on supply curve) F ( S$ ) F F
F 40 = $ 1 ( F 40 F 1 F )
A F
F F Q1 45 = $ 1 (
F F F F

4. F F F 4
F 45 F 1 F ) F
F Q3 F B
F F
F F
F F F
F F
F F F S$ F F
:$B
′ ″
S$ S$ S$
45 B
C A E
40
0 Q2 Q1 Q3 Q( F
F )
F F F
F F F (shift
supply curve) F F
F F F F F
/ F F F F
/ F F F / F
F F F / F
F F F F F ,
F F F F F
F , F
F F F
F F F F
F F F F F F F F S$
F F F F

5. F F F 5
F S$
″
( F F 40 = $ 1
(shift) A E F F
Q1 Q3) F F
F F F F
F / F F F F
/ F F F / F
F F F / F
F F F F F ,
F F F F F
F ,
F F F F
F F F F F F
F F F F F F
F F S$ F S$
′
( F F 40 = $ 1
(shift) A C F
F Q1 Q2)
(equilibrium exchange rate)
F F F (demand for
foreign exchange)) F (supply of foreign exchange)
F F F F F
F
:$B
S$
E
40
D$
0 QE Q( F :$)
F F F F

6. F F F 6
F E FF F F
F QE 40 = $ 1
F F F
F F F F F F
F F F F F
F F F F
F F F F S$ F S$
′
F
( F F F )
:$B
′
E′ S$ S$
41
A E
40
D$
0 Q3 Q2 Q1 Q( F :$)
F 40 = $ 1 (shift) E
A F F Q1 Q3
F F F F F EA ( Q1Q3 ) F
F F 40 = $ 1 41 = $ 1 F
F F F E E′
F A E′ F F F F
F Q2 F E′ F F 41 = $ 1
F
F F F F F
F F F F F F F
F F S$ F S$
′
F
( F F )
F F F F

7. F F F 7
:$
S$
′
E S$
41 A
E′
40
D$
0 Q1 Q2 Q3 Q( F :$)
F 41 = $ 1 (shift) E
A F F Q1 Q3
F F F EA ( Q1Q3 ) F
F F 41 = $ 1 40 = $ 1 F
F A E′ F F
F F F F F E E′ F
F F F F Q2 F
E′ F F 40 = $ 1
F F
F F F F F F F F F
F F F F F F
F ( ) F ( F F F )
F F F F

8. F F F 8
:$
S$
E′
41
E A
40
/
D$
D$
0 Q1 Q2 Q3 Q( F :$)
F F F F F F
F F F F F F F F F
F F ( ) F ( F F )
F
- appreciate F F ( F
) F ( ) ( F F )
F F F 40 =
$1 35 = $ 1 F F ( 40 35 )
F F (1 F ) F
- depreciate F F ( F
) F ( ) ( F F )
F F F 40
=$1 45 = $ 1 F F ( 40 45
) F F (1 F )
F
F F F ( F ) F
( F F ) F F
F F F F

9. F F F 9
( F F) F F ( F )
F F F ( F F F)
- revaluation F
F FF ( F ) F
( F F ) F F F F 40 =
$1 F 1 = $ 40 (1
1 F F 1
40
F ) F
F 35 = $ 1 F 1=$ 1
35
( 1 F F 1
35
F ) F F F F F
F ( F F
) F 40 = $ 1 35 = $ 1
F ( F F )
- devaluation F
F F F ( F ) F
( F F ) F F F F 40 =
$1 F 1 = $ 40 (1
1 F F 1
40
F ) F
F 45 = $ 1 F 1=$ 1
45
( 1 F F 1
45
F ) F F F F F
F ( F F
) F 40 = $ 1 45 = $ 1 F
( F F )
F F F ( F ) F
( F F ) F F
F F ( F F) ( F 40 =
$1 35 = $ 1 ) F F (
F) F F F ( F
F) ( F 40 = $ 1 45 = $ 1 ) F F
( )
F
F F F F
F F 35 =F $ 1 F
appreciate F revaluation F

10. F F F 10
F F F F
F F
F ( )
F ( F F)
F F F F 40 = $
1=$ 1
1=$ 1 45 = $ 1
40
1
35
( 40 =
$1 35 = $ 1)
F F F F F 40 = $
1 45 = $ 1 F F (depreciate)
F F F (devaluation )
F F F F 40 = $ 1 35 = $ 1
F F (appreciate) F
F F (revaluation)
F
F (indirect determination) (exogenous variable) F
F F F F

11. F F F 11
(shift) F FF F / F F
F F
1) F F (change in taste)
F F F F F
F F F F F F F F
F F F (
depreciate F ) ( F F
↑ → M ↑ → D$ ↑ → e ↑ → depreciate)
F F F F F
F F F
F F F F (
appreciate F )( F
F ↑ → X ↑ → S $ ↑ → e ↓ → appreciate)
2) F (relative income change)
F F F ( F
∆Y T
↑ ) F F ( F )
∆YUS
F F F F F F F
F F F (
∆Y T
depreciate F )( ↑ → M ↑ → D$ ↑ → e ↑ → depreciate)
∆YUS
F F F ( F
T
∆Y
↓ F )
∆YUS
F F ( F )
F F F F
F F ( appreciate
∆Y T
F )( ↓ → X ↑ → S$ ↑ → e ↓ → appreciate)
∆YUS
F F F
F F F F F
F
3) (relative price change)
F F F F

12. F F F 12
F F F ( F
PT
↓ F
P US
) F F ( F )
F F F
F F F (
T
appreciate F )( P
↓ → X ↑ → S$ ↑ → e ↓ → appreciate)
P US
F F F ( F
PT
↑ ) F F ( F
P US
) F F F F F F F
F F F (
PT
depreciate F )( ↑ → M ↑ → D$ ↑ → e ↑ → depreciate)
P US
F F
F F F F F
F
4) F F (capital flow)
F (r) F (i) F
(p ) → r = i− p
& &
F F F F
F F F F
F (r T ) F ( r US ) F
(capital inflow) F F
F F F F
F F ( appreciate
F ) ( r T > r US → capital inflow ↑ → S $ ↑ → e ↓ → appreciation)
F (r T ) F ( r US )
(capital outflow) F F F F
F F FF F F
F F ( depreciate
F ( r T < r US → capital outflow ↑ → D$ ↑ → e ↑ → depreciate )
5) F (speculation)
F F F F

13. F F F 13
F F F
( : growth rate) , (p )
&
F (r)
F F F F
F , F (
F ) / F F F
F ( ) / F
F FF F F F
F F F F F F
( depreciate F (
∆Y T
↑
∆YUS M↑
PT
F ↑
D$ ↑ → e ↑ → depreciate)
P US
( r T < r US ) ↑ → capital outflow ↑
F F F F
F F , F (
F ) / F F F F
( F F ) /
F F F F
F F F F
F F ( appreciate
F (
∆Y T
↓
∆YUS X↑
PT
F ↓
S$ ↑ → e ↓ → appreciate)
P US
( r T > r US ) ↑ → capital inflow ↑
6)
F F F F

14. F F F 14
F ( F
), ( F
F F F capital
outflow F F F F F
F F F F F
F F
F ) F
F
1) F F (
F ) F F
F
(balance of payment deficit)
F F F F F F F F F
F / F F F
F F / F F F
F ( F F F F
F ) (capital account : CA) ( F F
) F ( BOP deficit
→ e ↑ → X ↑, M ↓ → ( X − M) ↑ → CA ↑ → BOP ↑ )
2) F
F F F F F
F F F F F F F
F F F F F F F
F F F F F F F F
F F
F
F
F F F F/ F F
F F F
11.2 F
F F F F

15. F F F 15
(Balance of payment : BOP) F
(economic transactions) F F (residents)
F F F
F
F 4 F
1. (Current Account : CA) F
F F F
F F
. F (Trade balance account ) F
F F F F F (export of goods) F F
(import of goods)
. (Net service account)
F F F F (export of services) F
(import of services) F F F
F F
2. (Transfer payment account)
F F F F
F
F F F
3
3. F (Capital account)
F (assets) F F
(direct investment) F
(indirect investment) F F
F F F
F F F F F
F F 1
4. F (International reserve account)
F F (monetary gold) F F
F F F F

16. F F F 16
F F F
F F F F
(SDRs) F (International Monetary Fund : IMF)
F
F F ( )
F F
F F F F (
F F F / F F F
F F F F )
F ( F F )
4 F F F (Double Bookkeeping
Entry) F F F 2 F 1
F 1 F F F
F F
F F F , ,
F
F (-)
F (+)
F F (+)
F (-)
F
F
1) (short-run disequilibrium or cyclical
disequilibrium)
2
(1) F F F
F ( F F F ) F F F
F F F F

17. F F F 17
F F ( F
F →
↓ → X ↓ → ( X − M) ↓ → BOT ↓ → CA ↓ → BOP ↓ ) ( BOT = Balance of trade
F)
(2) F F
F F F F F
(
YT ↑ → M ↑ → ( X − M) ↓ → BOT ↓ → CA ↓ → BOP ↓ )( YT = F )
F F F
F F (
CPI T ↑ → P ↑ → X ↓ → ( X − M) ↓ → BOT ↓ → CA ↓ → BOP ↓ )(
& CPI T = Consumer
price index : F )
F F F
F F F F F ( F
F F F F F F F F
) F ( F F F
F F F F F F F
F )
2) F (long-run disequilibrium or
structural disequilibrium)
(1) F F
F F F F (aggregate
demand : AD) (aggregate supply : AS)
F F F F ( F F ) F
F
∆MS ↑ → AD ↑ → AS ( AD ↑> AS ↑) → AD > AS ,
→ P ↑ → ( X − M) ↓ → CA ↓ → BOP ↓
∆Cost ↑ → AS ↓ → AD > AS
↓ ↑
P↑→ F
(2) F (fundamental disequilibrium) F
F F F F
F F F F