Suppose two counties, Alpha and Beta, trade freely and allow investments to flow across their borders as well. Draw two graphs one for the supply and demand for Alphas currency and one for the supply and demand for Betas currency. Be sure to label the axes of your graphs. Show how the value of each currency will be affected if the interest rate on investments in Alpha rises while the return on investments in Beta remains unchanged.

Answer rating: 100% (QA)

Sure Lets start with the graph for the supply and demand of Alphas currency Supply of Alphas currency The supply of Alphas currency is represented by the blue line labeled SAlpha It shows the relation... View the full answer