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【正文】 infect the value of a currency Question 2: What are the basic factors that determine the value of a currency? In equilibrium, what is the relationship between these factors? GBUTtem 6 Basic factors that infect the value of a currency 1. Relative inflation rate 2. Relative interest rate 3. Relative ine level 4. Government control 5. Expectation GBUTtem 7 Relationship between the aforementioned factors ?Inflation rate and ine Ine increase as inflation rate increase ?Ine and interest rate Ine levels increase ? interest rates increase ?Inflation rate and interest rate Real interest rate = nominal interest rate – inflation rate GBUTtem 8 Question 5: Assume that Thailand’s central bank wishes to prevent a withdrawal of funds from its country in order to prevent further changes in the currency’s value. How could it acplish this objective using interest rates. GBUTtem 9 Measures (use interest rates
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