Macmillan LearningThe diagram shows the market equilibrium exchange rate between the South African rand and the U.S. dollar (USD). Recently,due to a shift in global demand, South African exports have decreased. Shift the demand and supply curves as appropriate.Exchange rate (USD per rand)XQuantity of randSupplyDemandAs a result of the change in the exchange rate,South Africa's current account balance will rise, andits financial account balance will fall.both South Africa's current account balance and itsfinancial account balance will rise.both South Africa's current account balance and itsfinancial account balance will fall.South Africa's current account balance will fall,and its financial account balance will rise.

It can be defined as the account to record the transaction of financial assets between the domestic…

Answered: The diagram shows the market…

The diagram shows the market equilibrium exchange rat due to a shift in global demand, South African exports ha Exchange rate (USD per rand) X Supply Demand

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 8P

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Question

Macmillan Learning
The diagram shows the market equilibrium exchange rate between the South African rand and the U.S. dollar (USD). Recently,
due to a shift in global demand, South African exports have decreased. Shift the demand and supply curves as appropriate.
Exchange rate (USD per rand)
X
Quantity of rand
Supply
Demand
As a result of the change in the exchange rate,
South Africa's current account balance will rise, and
its financial account balance will fall.
both South Africa's current account balance and its
financial account balance will rise.
both South Africa's current account balance and its
financial account balance will fall.
South Africa's current account balance will fall,
and its financial account balance will rise.

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