Category: Economic Conditions
Demand and Supply of Foreign Exchange
Demand and Supply of Foreign Exchange influences the determination of exchange rates and vice versa. The demand for foreign exchange is inversely proportional to the rise of exchange rate. As the exchange rate goes up the demand for foreign exchange declines. The quantity of foreign exchange demanded falls. The supply of foreign exchange shifts depending on demand and not on the exchange rate. If the supply aspect of transaction is plotted on a graph it will be vertical since the supply of foreign currency deposits available at any time is fixed.
Theory of Money Demand
In economics, the Theory of Money Demand stresses on the positive relationship existing between the general prices or the nominal expense rate and the total amount of money.
Interest Theory
The main focus of the Interest Theory is on the charged amount paid against borrowed money. Though money is the most familiar form of asset at the time of lending, yet during arrangements of fiscal lease, Interest Theory considers other asset forms like consumer goods through hire purchase, shares, factories, aircrafts and other primary assets as well. In each of these cases, the rate of interest is charged on the total asset values, just like it is calculated on money.
Loanable Funds Theory of Interest
According to the Loanable Funds Theory of Interest, the rate of interest is calculated on the basis of demand and supply of loanable funds present in the capital market. The concept formulated by Knut Wicksell, the well-known Swedish economist, is among the most important economic theories.
Strategy in Game Theory, Types of Strategies in the Game
Strategy in Game Theory is the most significant aspect of the game, since the strategy determines the player’s fate in the game. It is the complete set of action that one player decides to bank on while he/she is plating the game. This strategy aids the player in handling the situation the player is in. The action one player takes during any stage of the game depends on the strategy. A strategy profile is a set of fixed strategies that each and every player decides to employ. A strategy profile consists of only one strategy for each player respectively.
