Exchange Rates Coursework Example | Topics and Well Written Essays - 250 words

Exchange Rates - Coursework Example In addition to that, it enhanced the income tax rates, cost of capital, sales growth rate which in return maximized profits. Minimization of transaction costs leverages exchange rates with a target of maximizing profits (Ostrow, 2011). Transaction cost helps in determination of goods and services for leveraging economic exchange rates through the implementation of the minimum prices in the market. Transaction cost consists of the bargaining cost that is regarded as an acceptable agreement for increasing profits. Apart from having economic performance and political stability for seeking out the exchange rate, transaction cost also enhanced investment funds for increasing profits in the U.S. The monetary policy of the U.S. characterizes the economic environment and is aimed at improving the exchange rates between the U.S. and other countries (Mark, 2002). Banks in the U.S and other nations buy the domestic currency so as to make the exchange rates stable. This therefore means that the supply of money is controlled by the economic environment and targets a rate of interest for enhancing economic growth between the U.S and other nations. Mark (2002) claims that the exchange rate is negatively affected by this economic environment. The value of exchange rates between the U.S and other nations was reduced due to irregular flow of currencies and fluctuations in the exchange