Hi all
A substantial current account deficit on the balance of payments causes the value of a currency to depreciate - right? Now if I want to draw this on a supply and demand diagram, does the supply curve shift and the demand curve remain the same, or does the demand curve shift and the supply curve stay the same?
Thanks!
A substantial current account deficit on the balance of payments causes the value of a currency to depreciate - right? Now if I want to draw this on a supply and demand diagram, does the supply curve shift and the demand curve remain the same, or does the demand curve shift and the supply curve stay the same?
Thanks!