This is a question related to exchange rates. I'd really appreciate it if you could help me
Question:
This is a question related to exchange rates. I'd really appreciate it if you could help me out.
I'm given two currencies, U.S. dollar and Korean won, and given that $1 = 100 won (I'm aware this makes no sense). I am then asked to show the decrease in supply of dollars in both of the currency markets. I know that in the market for currency exchange market (for dollars), the supply curve would shift up to the left, resulting in appreciation of dollar and depreciation of 1 won.
But I'm not sure how I should show the effect of the decrease in supply of dollars in the market for currency exchange for Korean won. Since the demand for Korean won ultimately comes from those wanting to exchange dollars into won, would the decrease in supply of dollars shift the demand curve for Korean won down to the left?