Tuesday, August 16, 2011

Someone please help me with this exchange rates and the balance of payments question?

Suppose that the following two events take place in the market for Kuwait’s currency, the dinar: The U.S demand for oil, Kuwait’s main export good, declines, and market interest rates on financial ets denominated in dinar decrease relative to U.S. interest rate. What happens to the dollar price of the dinar? Does the dinar appreciate or depreciate relative to the dollar

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