Explain and determine effects on equilibrium exchange rates

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Question: Suppose that the foreign exchange market is entirely determined by market forces. Using BOTH the Demand and Supply for Singapore Dollars (SGD) AND the Hong Kong Dollar (HKD) in two (2) separate diagrams (for each part), explain and determine the effects on the equilibrium exchange rates and quantities between the two (2) currencies under the following scenario: (Consider ONLY the two (2) countries and not beyond. Discussions of spillover/secondary effects are also NOT required.)

Singapore suffers from a recession, but Hong Kong's economy becomes stronger.

Reference no: EM133261261

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