Hello Tutors,

Can you please help me understand better the following including simple examples or graph interpretations?

1. what happens to nominal and real exchange rates, and to the domestic price level following:

• A change in the relative supply of domestic goods
• A change in relative demand of domestic goods

1. what type of agents and for what reason they participate to the forward exchange rate market

Would really appreciate your kind help on these.

Best regards,

M.Dee