In book it is written that increase in demand is more demanded at an existing price but in diagram they show when demand increases rate of exchange increases so how there is Inc. In demand in demand to an EXISTING PRICE?

Dear student,

When demand of foreign currency increase it means that more of foreign currency is demanded at current supply or current exchange rate.
.In given fig. The demand of US dollar has increased which has shifted its demand curve rightwards from DD to D1D1, with increase in demand from OQ to OQ1, the rate of exchange has increased from OR to OR1. It has increased the exchange rate from 1 US $ = Rs. 60 to 1 US $ = Rs. 70



Regards

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