(2) General level of domestic prices (Pi) and external (Pe) - Pi if it increases, the real price of

The basic difference between these two regimes is that while in the case of fixed exchange rates the exchange rate is defined by the national monetary authorities in the same floating exchange rate is formed in the foreign exchange market through sacks sandwiches tempe supply movements and demand for foreign currency assets .
Foreign Exchange Market is the environment in which they carry out the foreign exchange transactions between the agents authorized by the Central Bank (banks, brokers, distributors.) And between these and their clients, as the Bureau de Mercatus Exchange.
(2) General level of domestic prices (Pi) and external (Pe) - Pi if it increases, the real price of imports in national currency will decrease and therefore imports and the demand for foreign exchange will be encouraged; If Pe increases, the real price of imports in domestic currency will rise and therefore imports and the demand for foreign currency will be discouraged;
(3) Internal Rate of Interest (ii) and External (Ie) - if read to rise, there will be an incentive to the net inflow of capital in the country, as it has become more attractive sacks sandwiches tempe than the outside, so the supply of foreign currency in the country sacks sandwiches tempe increases with a constant demand; otherwise, if it grows, there will be a stimulus will net outflow of capital abroad, since it is higher than the internal soon the supply of currency decreases, with a constant demand.
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