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O Macmillan Learning The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph. a. Suppose the average income of Median Earth's citizens increases by 20% more than the average income of Normandy's citizens. How will this affect the foreign exchange market for shillings (Median Earth's currency)? Move the appropriate curve in the graph to demonstrate this change. 0.50 040 dom R 8030 3025 yox 0.15 2010 0.00 0:00 10 20 30 Supply of shillings X Demand for shillings 40 Quantity of shillings (in thousands) 70

O Macmillan Learning The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph. a. Suppose the average income of Median Earth's citizens increases by 20% more than the average income of Normandy's citizens. How will this affect the foreign exchange market for shillings (Median Earth's currency)? Move the appropriate curve in the graph to demonstrate this change. 0.50 040 dom R 8030 3025 yox 0.15 2010 0.00 0:00 10 20 30 Supply of shillings X Demand for shillings 40 Quantity of shillings (in thousands) 70

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Macmil b. What is the new equilibrium exchange rate after the change in the foreign exchange market occurs? Enter your answer exactly and do not round: if the new exchange rate is 0.08, make sure you input your answer as 0.08. 0.25 doubloons per shilling
Transcribed Image Text:Macmil b. What is the new equilibrium exchange rate after the change in the foreign exchange market occurs? Enter your answer exactly and do not round: if the new exchange rate is 0.08, make sure you input your answer as 0.08. 0.25 doubloons per shilling
<Question 9 of 18 O Macmillan Learning Attempt 4 The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph. a. Suppose the average income of Median Earth's citizens increases by 20% more than the average income of Normandy's citizens. How will this affect the foreign exchange market for shillings (Median Earth's currency)? Move the appropriate curve in the graph to demonstrate this change. 0.50 0.45 70.40 5035 & 8030 3025 10.20 0.15 0.10 0.05 0.00 0 10 Supply of shillings Demand for shillings 20 30 40 50 40 Quantity of shillings (in thousands) 70 80 90
Transcribed Image Text:<Question 9 of 18 O Macmillan Learning Attempt 4 The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph. a. Suppose the average income of Median Earth's citizens increases by 20% more than the average income of Normandy's citizens. How will this affect the foreign exchange market for shillings (Median Earth's currency)? Move the appropriate curve in the graph to demonstrate this change. 0.50 0.45 70.40 5035 & 8030 3025 10.20 0.15 0.10 0.05 0.00 0 10 Supply of shillings Demand for shillings 20 30 40 50 40 Quantity of shillings (in thousands) 70 80 90
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