Graph the demand for and supply of Australian dollars for euros and label each axis. Show graphically and explain the effect of a decrease in European interest rates relative to Australian interest rates on the demand for and supply of Australian dollars and the resulting change in the exchange rate of euros for Australian dollars. Please draw a graph to explain the effect of a decrease in European interest rates relative to Australian interest rates.

Why might the change in the exchange rate lead to an increase in Australia's current account deficit?