If the interest rate in New Zealand is lower than in other countries, it means that investors can get a higher return on their investments in other countries. This will lead to the following changes in the demand and supply of the New Zealand Dollar (NZD) in the Foreign Exchange Market (FOREX):

1. Demand for NZD: The demand for NZD will decrease. This is because investors will sell their NZD to buy foreign currencies and invest in other countries where they can get a higher return. As a result, the demand curve for NZD will shift to the left.

2. Supply of NZD: The supply of NZD will increase. This is because when investors sell their NZD to buy foreign currencies, the amount of NZD available in the market increases. As a result, the supply curve for NZD will shift to the right.

In conclusion, if the interest rate in NZ is lower than other countries, the demand for NZD will decrease and the supply of NZD will increase in the FOREX. This will lead to a depreciation of the NZD against other currencies.

Question

If the interest rate in New Zealand is lower than in other countries, it means that investors can get a higher return on their investments in other countries. This will lead to the following changes in the demand and supply of the New Zealand Dollar (NZD) in the Foreign Exchange Market (FOREX):

1. Demand for NZD: The demand for NZD will decrease. This is because investors will sell their NZD to buy foreign currencies and invest in other countries where they can get a higher return. As a result, the demand curve for NZD will shift to the left.

2. Supply of NZD: The supply of NZD will increase. This is because when investors sell their NZD to buy foreign currencies, the amount of NZD available in the market increases. As a result, the supply curve for NZD will shift to the right.

In conclusion, if the interest rate in NZ is lower than other countries, the demand for NZD will decrease and the supply of NZD will increase in the FOREX. This will lead to a depreciation of the NZD against other currencies.

Knowee AI · Accepted Answer

If the interest rate in New Zealand is lower than in other countries, it means that investors can get a higher return on their investments in other countries. This will lead to the following changes in the demand and supply of the New Zealand Dollar (NZD) in the Foreign Exchange Market (FOREX):

1. Demand for NZD: The demand for NZD will decrease. This is because investors will sell their NZD to buy foreign currencies and invest in other countries where they can get a higher return. As a result, the demand curve for NZD will shift to the left.

2. Supply of NZD: The supply of NZD will increase. This is because when investors sell their NZD to buy foreign currencies, the amount of NZD available in the market increases. As a result, the supply curve for NZD will shift to the right.

In conclusion, if the interest rate in NZ is lower than other countries, the demand for NZD will decrease and the supply of NZD will increase in the FOREX. This will lead to a depreciation of the NZD against other currencies.

If the interest rate in NZ is lower than other countries, how will demand and supply of NZD change at the FOREX?

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If the interest rate in NZ is lower than other countries, how will demand and supply of NZD change at the FOREX?

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