(a) Why does a "demand for foreign exchange" exist by a country's economic actors? Explain. Why does this demand curve have its downward slope? Briefly explain.
(b) What economic actions give rise to a "supply of foreign exchange" to a country? Explain. Can we be sure that this supply curve will always have an upward slope? Briefly explain.
(c) Finally, put a demand curve and supply curve of foreign exchange together and indicate the equilibrium exchange rate. Then explain how and why the equilibrium exchange rate would change if there were a sudden increase in the supply of foreign exchange to the country.

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The Answer of (a) Why does a "demand for foreign exchange" exist by a country's economic actors? Explain. Why does this demand curve have its downward slope? Briefly explain.
(b) What economic actions give rise to a "supply of foreign exchange" to a country? Explain. Can we be sure that this supply curve will always have an upward slope? Briefly explain.
(c) Finally, put a demand curve and supply curve of foreign exchange together and indicate the equilibrium exchange rate. Then explain how and why the equilibrium exchange rate would change if there were a sudden increase in the supply of foreign exchange to the country.

(A) Why Does a "Demand for Foreign Exchange" Exist by a Country's