Question

Carli Grimes & 1019 251 AM Quiz: Practice Quiz Chapter 33 This Question: 1 pt This Quiz: 10 pts possibi market for the dinar: The U.S. demand for ail, Kuwaifs main export good, decines and market intenest rates on in dinar decrease relative to U.S. interest rates Moreover assume hat exchange Using the line drawing tool, show how the market for the dinar is impacted by these events Properly label this ine Carefully folow the instructions above, and only draw the required objects According to your graph, the dinar has with sespect to the dollar devalued depreciated appreciated 1 2

Answer 1

Since interest rate decline in Dinar denominated currency, Dinar will losr its attractiveness with respect to dollar. Secondly the exports too will decline. Hence Us dollar appreciates and its demand increases and supply decreases.

All this will cause Dinar to Depreciation against US Dollar.

The graph has been shown below.