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Demand for a currency and the interest rate

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 assets denominated in dinar decrease relative to U.S. interest rates. What happens to the dollar price of the dinar? Does the dinar appreciate or depreciate relative to the dollar?

 

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M9214809

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