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The diagram shows the market equilibrium exchange rate between the South African rand and the U.S. dollar (USD). Suppose that capital flows from the United
The diagram shows the market equilibrium exchange rate between the South African rand and the U.S. dollar (USD). Suppose that capital flows from the United States to South Africa decrease. Shift the demand and supply curves as appropriate. This change in the exchange rate will result in O the balance of payments on the South African current account and financial account both falling. Supply O the balance of payments on the South African current account falling as the balance of payment on the financial account rises. O the balance of payments on the South African current Exchange rate (USD per rand) account and financial account both rising. O the balance of payments on the South African current Demand account rising as the balance of payment on the financial account falls. Quantity of rand
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