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Price Po P Qo Domestic supply of goods Q Swo Sw1 Domestic i demand of goods O there is a trade surplus, which will lead
Price Po P Qo Domestic supply of goods Q Swo Sw1 Domestic i demand of goods O there is a trade surplus, which will lead to an eventual appreciation of the currency. However, increased demand for that country's currency can prevent this from happening. O there is a trade deficit and eventually the currency is going to depreciate due to the high demand for that currency in the foreign exchange market. there is a trade deficit, which will lead to the currency remaining at its current value. O there is a trade surplus and eventually the currency is going to appreciate due to the high demand for that currency in the foreign exchange market
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