11/29/2017 11:55 PM 42.5/100 Print-Calculator Grad Question 1 of 1 Map Sapling L
ID: 1114799 • Letter: 1
Question
11/29/2017 11:55 PM 42.5/100 Print-Calculator Grad Question 1 of 1 Map Sapling Learning The dia shows the market equilibrium e e rate between the South African rand and the U.S. dollar. Suppose that capital flows from the U.S. to South Africa decrease. Shift the demand and supply curves below as appropriate. This change in the exchange rate will result in.. the balance of payments on the South African current account and financial account both falling. Supply O the balance of payments on the South African current account rising as the balance of account falling on the financial the balance of payments on the South African current account and financial account both rising. the balance of payments on the South African current account falling as the balance of payment on the financial account rises. Demand Quantity of Rand Previous Gve up & View Solution e, chock Answer·Next ExtL ? HintExplanation / Answer
Answer: B - The balance of Payment on the south african current account rising as the balance of payment on the financial account falling.
Explanation:
With the decrease in capital flows from US to South Africa, the demand curve for rand would fall and shift inwards to the left. As a result, the rand would depreciate as against the dollar, hence increases the current account. As well as the quantity of rand demanded would reduce, hence falls in financial account.
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