- Subject index
Interest in economics is at an all-time high. Among the challenges facing the nation is an economy with rapidly rising unemployment, failures of major businesses and industries, and continued dependence on oil with its wildly fluctuating price. Economists have dealt with such questions for generations, but they have taken on new meaning and significance.Tackling these questions and encompassing analysis of traditional economic theory and topics as well as those that economists have only more recently addressed, 21st Century Economics: A Reference Handbook is a must-have reference resource.Key FeaturesProvides highly readable summaries of theory and models in key areas of micro and macroeconomics, helpful for students trying to get a "big picture" sense of the fieldIncludes introductions to relevant theory as well as empirical evidence, useful for readers interested in learning about economic analysis of an issue as well for students embarking on research projectsFeatures chapters focused on cutting-edge topics with appeal for economists seeking to learn about extensions of analysis into new areas as well as new approaches Presents models in graphical format and summarizes empirical evidence in ways that do not require much background in statistics or econometrics, so as to maximize accessibility to students.
Chapter 42: Exchange Rates
Every day, millions of companies and individuals around the world do business with companies and individuals located in different countries. Often these transactions involve two or more currencies. Juanita, a resident of the United States, wants to send her grandmother in Mexico money to buy a new microwave. Juanita earns income in U.S. dollars, but her grandmother needs Mexican pesos to buy the microwave in Mexico. Juanita knows that the microwave costs 20,000 Mexican pesos. How many U.S. dollars would she need to send to her grandmother? This example is just one of many situations in which there is a need for a foreign exchange transaction. Individuals and companies enter into millions of foreign exchange transactions every day. The standard for how ...