(a) In the five years between 2007 and 2012 the real effective exchange rate of the Swiss franc increased by 19%, the Chinese yuan by 25% and the Japanese yen by 23%. However, the USA, UK and eurozone experienced a depreciation of their currencies. Assess factors that influence the exchange rate of a currency (20 marks) 

(b) To what extent might a depreciation in the value of a country’s currency improve its economic performance? (30 marks)

Answer rating: 100% (QA)

Answer a Factors Influencing Exchange Rates 20 marks The appreciation of the Swiss franc Chinese yuan and Japanese yen and depreciation of the US dollar British pound and euro can be explained by seve... View the full answer