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ECO - The Foreign Exchange Market and Exchange Rates




Question;? Use GRAPH TO ANSWER QUESTION? a. Briefly explain whether the dollar appreciated or depreciated against the yen.? b. Which of the following events could have caused the shift in demand shown in the graph?o i. Interest rates in the United States have declined.o ii. Income rises in Japan.o iii. Speculators begin to believe the value of the dollar will be higher in the future.2.14[Related to the Making the Connection on page 993] The humorist Dave Barry once wrote the following: ?In economic news, the Federal Reserve Board, responding to recession fears and the continued weakening of the dollar, votes unanimously to be paid in euros.? Granted that Barry was joking, what advantages would there be to U.S. citizens being paid in euros at a time when the dollar was ?weakening?? Why did the dollar lose value against most other currencies beginning in 2002?From Dave Barry, Dave Barry?s History of the Millenium (So Far), (New York: Berkeley Books, 2008), pp. 230?231.


Paper#56670 | Written in 18-Jul-2015

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