The following paragraphs discuss the impact of various economic events on the exchange rate. Complete the paragraphs by lling in the blanks. Use an}.r of the words from the following list (you can use each of these words as manyr times as you wish): demand sunply left right buyr sell imports exports rise fall increases decreases What happens to the exchange rate when the current account balance falls? A falling current account balance means that the value of are rising relative to . Let's assume that one does rise and one does fall to cause the current account balance to fall. affects the for/of $NZ so a decline in this means for/of $NZ shifts left. affects the for/of $NZ so a rise in this means for/of $NZ to shift right. The combined effect from the fall in the current account balance is that we expect the value of the $NZ to What happens to the exchange rate when New Zealand interest rates fall relative to the rest of the world? A fall in NZ interest rates (all else held oonsta nt) reduces for/of $NZ assets which reduces for/of $NZ in the foreign exchange market. Some holders of NZ assets will now wish to $NZ assets. This will increase the for/of $NZ. Both of these cause the value of the $NZ to