can u answer this?

Question

can anybody plz explain me the true reason behind the difference of currency of u.s & u.k.

as far as the u.k is concerned , don't tell me, tht it's rich, bcoz
GDP (PPP) 2005 estimate
- Total $1.833 trillion (6th)
- Per capita $30,470 (18th)

& of u.s

GDP (PPP) 2005 estimate
- Total $12.36 trillion (1st)
- Per capita $41,800 (3rd)


Yeah thts shocking, but truth is, so now tell me , whts the reason u.k gdp is of 88 inr. whereas usd is of 47.

Answer 1

Take an economics class
Currency values are determined by supply and demand. As demand for one currency or the other changes, the exchange rate changes.

You need to consider other factors, like how much of each currency is in circulation (refered to by economists as M5) and demand (for example, if the USA increases the interest rate on government debt, more people will buy treasury bonds).
Did you know that the biggest holder of US government debt is the central bank of China?

Answer 2

I don't think this has anything to do with the relative values of each country's currency, since the GDP figures for both countries are in dollars. The USA simply has a larger economy as evidenced by the larger GDP (Gross Domestic Product) value. The GDP is simply the measure in monetary terms of how how much product a given country produces.

The US population was 280 million in 2000 for example and the UK population was 59 million. Since the population of the US is therefore 4.74 times that of the UK, all things considered equal, then the GDP of the US should be 4.74 times that of the UK. Since different countries have different consumer price indexes (costs of living), all things are actually not considered equal.

Answer 3

exchange rates are determined by good, old fashioned supply and demand. there is a larger supply of the US dollar compared to the British Pound. two demands are at work, Speculative and Transaction. Speculative is purchasing foreign currency for the purpose of gaining interest on an investment. Transaction demand is like you or me getting paycheck, walking into a bank and asking forour money in return for the check, or handing the lady a $20 to pay for something that is $9. she has to have currency to return your change to you. Transaction demand is based on the sales of goods and services within the country. if people are holding their money in other instruments rather than spending it, demand goes down. if they are spending a lot, like during Christmas time, demand starts to go up.

Answer 4

Mostly differences in trade. Currencies chancge in value all the time according to the whims of the market.

Answer 5

supply and demand, purchase of goods & services, trade (imports and exports), employment rates, confidence in the goverment, tourism and many many many more factors....

Answer 6

r u malaysian?