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Use the demand and supply diagram for domestic assests to demonstrate the following What happens to the exchange rate when the foreign interest rate increases?
Use the demand and supply diagram for domestic assests to demonstrate the following
- What happens to the exchange rate when the foreign interest rate increases?
- What happens to the exchange rate when the domestic interest rate increases as a result of increase in inflation expectations?
- What happens to the exchange rate when the expected future exchange rate increases?
- What happens to the exchange rate when the government enacts policies to protect US producers?
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