Unsure if my answers and graphs are correct Suppose the price level in Denmark rises by 7%, while the price level in Malaysia remains the same. That is, the inflation rate in Denmark is higherthan in Malaysia.Drag the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner.RINGGIT PRICE OF KRONERIQUANTITY OF KRONERS2S₁D2D₁KTODemand for KronerTOSupply of KronerSuppose the real interest rates in Malaysia and Denmark are initially the same. Then the real interest rate in Denmark rises, while the real interestrate in Malaysia remains the same. This will cause the supply of kroner to decrease and the demand for kroner to increase which causesthe Malaysian ringgit to depreciate relative to the Danish krone. The following questions focus on the exchange rate between the Malaysian ringgit and the Danish krone. Assume the exchange rate is flexible. Theexchange rate is defined as the number of ringgit you must pay for one krone.Suppose an economic downturn in Denmark causes Danish incomes to decrease, while Malaysian incomes remain unchanged.Shift the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner if all other things remain equal.RINGGIT PRICE OF KRONERAS₂QUANTITY OF KRONERS₁Demand for KronerATOTDemand for Kroner-Supply of KronerThe decrease in Danish incomes causes the Danish krone to appreciate relative to the Malaysian ringgit and causes the Malaysian ringgit todepreciate relative to the Danish krone.Suppose the price level in Denmark rises by 7%, while the price level in Malaysia remains the same. That is, the inflation rate in Denmark is higherthan in Malaysia.Drag the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner.

Part 1 If the price level in Denmark rises by 7%, the demand for Danish Krone will fall and the…

Suppose the price level in Denmark rises by 7%, while the price level in Malaysia remains the same. That is, the inflation rate in Denmark is higher than in Malaysia. Drag the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner. RINGGIT PRICE OF KRONER QUANTITY OF KRONER S₂ S₁ D₂ D₁ A Demand for Kroner Supply of Kroner Suppose the real interest rates in Malaysia and Denmark are initially the same. Then the real interest rate in Denmark rises, while the real interest ate in Malaysia remains the same. This will cause the supply of kroner to decrease and the demand for kroner to increase which causes he Malaysian ringgit to depreciate relative to the Danish krone.

Suppose the price level in Denmark rises by 7%, while the price level in Malaysia remains the same. That is, the inflation rate in Denmark is higher than in Malaysia. Drag the appropriate curve or curves on the following graph to illustrate how this affects the market for Danish kroner. RINGGIT PRICE OF KRONER QUANTITY OF KRONER S₂ S₁ D₂ D₁ A Demand for Kroner Supply of Kroner Suppose the real interest rates in Malaysia and Denmark are initially the same. Then the real interest rate in Denmark rises, while the real interest ate in Malaysia remains the same. This will cause the supply of kroner to decrease and the demand for kroner to increase which causes he Malaysian ringgit to depreciate relative to the Danish krone.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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