higher interest fates 3. All else equal, domestic currency appreciation leads to a 4. Under a fixed exchange rate, a decrease in demand for foreign currency must be met with a(n) in supply of the foreign currency. 5. Suppose (1+i)>(1+i*)F/R. Answer the following: a. Does the interest parity condition hold? in net exports. b. Will money flow to domestic or foreign? c. What will happen to the value of the domestic currency in the spot market? The foreign currency? 6. Suppose F>R. This means the domestic currency is selling at a forward currency is selling at a forward and the foreign