Help - Money Banking & Financial Market

a) Explain with the aid of appropriate graphs the effect of the following on exchange rates in the short-run:

i. A decrease in the domestic interest rate.

ii. An increase in the foreign interest rate.

iii. An increase in the expected domestic price level.

b) Explain the impact of the following factors on the exchange rate in the long run:

i. A decrease in trade barriers.

ii. A decrease in demand for a countrys imports.