Using any exchange rate graphs: Part A: Illustrate how a rise in the real foreign interest rate causes the domestic currency to depreciate. Part B: Illustrate how a fall in the foreign real interest rate causes the domestic currency to appreciate. Make sure to properly label all parts of the graph for full credit.

Answer rating: 100% (QA)

Part A Rise in the Real Foreign Interest Rate Causes Domestic Currency Depreciation To illustrate this you would typically use a standard supply and d... View the full answer