ILO:

a) Exchange rate systems:
o floating
o fixed
o managed

b) Distinction between revaluation and appreciation of a currency

c) Distinction between devaluation and depreciation of a currency

d) Factors influencing floating exchange rates

e) Government intervention in currency markets through foreign currency transactions and the use of interest rates

f) Competitive devaluation/depreciation and its consequences
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g) Impact of changes in exchange rates:
o the current account of the balance of payments (reference to Marshall-Lerner condition and J curve effect)
o economic growth and employment/unemployment
o rate of inflation
o foreign direct investment (FDI) flows

Exchange rate systems case studies

Explain how the UK's attempted to fix the £ exchange rate. (5 marks)
BBC Six o'clock news 16th September 1992 Sterling crisis
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Assess the impact of Egypt's decision to devalue its currency on its economic performance. (10/12 marks)
​ Inside Story - Can Egypt's decision to devalue currency help boost its economy? ​
Explain how China devalued its currency. (5 marks)
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How Does China Manipulate Its Currency?
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Assess the impact of recent changes in the value of the £ against other major currencies. (10/12 marks)
How the value of the pound affects you | Business Explained
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Additional reading:
​The 6 Factors That Influence Exchange Rates

Exchange rate revision webinars

Watch the following webinars to consolidate your knowledge of exchange rates:
Floating and Fixed Exchange Rates
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Difference between Depreciation and Devaluation I A Level and IB Economics
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