Repeat Exercise 6 under the assumption that instead of a fall in demand for foreign exchange, there
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Repeat Exercise 6 under the assumption that instead of a fall in demand for foreign exchange, there is an increase in supply.
data from exercise 6
Credit entries in a country’s balance of payments generate a supply of foreign money in the foreign exchange market while debit entries reflect a demand for foreign money. Market-determined exchange rates are determined by the intersection of demand and supply curves for foreign exchange. What could cause such an increase?
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