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Consider two countries with friendly trade relations, South Africa and India. Suppose that the South African rand is expected to appreciate relative to the Indian
Consider two countries with friendly trade relations, South Africa and India. Suppose that the South African rand is expected to appreciate relative to the Indian rupee. Show how the change in the expected exchange rate affects the equilibrium exchange rate by shifting one or both of the curves on the graph. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Demand Supply EXCHANGE RATE (rands per rupee) QUANTITY (Millions of rupees) Demand S 0 S 1 As a result of the change in the expected exchange rate, the South African rand appreciated in value relative to the Indian rupee
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