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Foreign Exchange Rates to Consumers

1. Why should consumers be concerned with movements in foreign exchange rates?

Use 2 references.

2. (a) Distinguish between primary markets and secondary markets.
(b) Distinguish between money and capital markets.

Use 2 references.

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1. Why should consumers be concerned with movements in foreign exchange rates?

* Consumers need to understand that movements in foreign exchange rates affect their livelihoods. This is in essence because both imports and exports are affected by foreign exchange rates, which also affect the inflation rate of an economy. Exchange rates thus affect expenditure patterns as well as budgets which in turn affect the cost of living for consumers. It is also important for consumers to understand from a more global perspective that movements in foreign exchange rates affect how they are able to economically interact with other countries. If for example a consumer wants to buy a product, he or she would do so most easily with another currency whose rate is more favorable to the ...

Solution Summary

The solution discusses foreign exchange rates to consumers, including primary vs. secondary and money vs. capital markets.

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