1. Explain how the demand for Country A’s goods by people living in Country B affects demand for Country A’s currency and supply of Country B’s currency.
2. Graphically show the market for some foreign currency, currency A, in terms of U.S. dollars.
3. Graphically show an appreciation in the value of currency A, in terms of U.S. dollars.
4. Graphically show a depreciation in the value of currency A, in terms of U.S. dollars.
5. List the factors that affect the equilibrium exchange rate.