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In the Model of the Demand and Supply of Dollar

question 54

Essay

In the model of the demand and supply of dollar assets use a graph to explain how a change in the domestic interest rate affects the equilibrium exchange rate.


Definitions:

Foreign Bonds

International bonds issued in a single country, usually denominated in that country’s currency.

Denominated

Refers to the currency in which a financial transaction or commodity is quoted or dealt with.

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