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Find demand and supply curve for foreign exchange

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Reference no: EM132667714

1. Start with a demand and supply curve for foreign exchange: Explain what the "price" means:

Explain with a graph as well as in words:

2. If there is economic growth in domestically, what happens to net exports and the domestic currency (demand or supply shift)?

3. If there is economic growth in a foreign country, what happens to net exports and the domestic currency (demand or supply shift)?

4. If domestic interest rates rise, what happens to the demand and supply curves? Does the domestic currency appreciate or depreciate?

5. What often happens to a currency when expectations are that a currency will depreciate?

Reference no: EM132667714

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