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) Quantity of rand Supply Demand As a result of the change in the exchange rate, 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 rise, 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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Chapter20: International Finance
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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)
Quantity of rand
Supply
Demand
As a result of the change in the exchange rate,
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 rise, and
its financial account balance will fall.
South Africa's current account balance will fall,
and its financial account balance will rise.
Transcribed Image Text: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) Quantity of rand Supply Demand As a result of the change in the exchange rate, 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 rise, 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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