Suppose that yesterday, the U.S. dollar was trading on the foreign exchange market at 0.75 euros per U.S. dollar and today the U.S. dollar is trading at 0.80 euros per U.S. dollar. Which of the two currencies (the U.S. dollar or the euro) has appreciated and which has depreciated today?
Suppose that yesterday, the U.S. dollar was trading on the foreign exchange market at 0.75 euros
per U.S. dollar and today the U.S. dollar is trading at 0.80 euros per U.S. dollar. Which of the two
currencies (the U.S. dollar or the euro) has appreciated and which has
b) Suppose that the exchange rate for the Mexican peso fell from 15 pesos per U.S. dollar to 10 pesos
per U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan to
buy in the foreign exchange market?
c) Suppose that the exchange rate rose from 80 yen per U.S. dollar to 90 yen per U.S. dollar. What is
the effect of this change on the quantity of U.S. dollars that people plan to sell in the foreign
exchange market?
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