Question: How and why does an increase in the expected future exchange rate change the current demand for U.S. dollars and the demand curve for dollars?

  • How and why does an increase in the expected future exchange rate change the current demand for U.S. dollars and the demand curve for dollars?
  • How and why does an increase in the expected future exchange rate change the supply of U.S. dollars and the supply curve of dollars?
  • What is the effect on the equilibrium exchange rate?

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