Forex Questions and Answers - FXAnswer

Theory of elasticity is a model of exchange rate determination stating that the exchange rate is simply the price of foreign exchange that maintains the BOP in equilibrium. The degree to which the exchange rate responds to a change in the trade balance depends entirely on the elasticity of demand to a change in price.

by

Kingpin

1 year ago

Elasticity is an economic term that measures responsiveness. It measures the response of one economic variable to a change in another economic variable. In forex, it is a theory relating to the determination of the exchange rate where the price of the foreign exchange that keeps the balance of payments in equilibrium is the actual exchange rate.

by

fxpie

1 year ago

elasticity is the ratio of the percent change in one variable to the percent change in another variable. It is a tool for measuring the responsiveness of a function to changes in parameters in a relative way. Commonly analyzed are elasticity of substitution, price and wealth

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hanan

1 year ago

What Does Elasticity Mean?
A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which individuals (consumers/producers) change their demand/amount supplied in response to price or income changes.

Calculated as:


Investopedia explains Elasticity
Elasticity is used to assess the change in consumer demand as a result of a change in the good's price. When the value is greater than 1, this suggests that the demand for the good/service is affected by the price, whereas a value that is less than 1 suggest that the demand is insensitive to price.

Businesses often strive to sell/market products or services that are or seem inelastic in demand because doing so can mean that few customers will be lost as a result of price increases

by

Tyce

1 year ago

Solid mechanics is the branch of mechanics, physics, and mathematics that concerns the behavior of solid matter under external actions

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thegreeks

1 year ago