17 Exchange Rate Movements Some countries encourage movements in their exchange rate relative to those of some other countries as a short-term means of addressing foreign trade imbalances. For each of the following scenarios, evaluate the impact the announcement would have on a Danish importer and a Danish exporter doing business with the foreign country.

(a) Officials in the Danish government announce that they are comfortable with a rising krone relative to the euro.

(b) The Bank of England announces that it feels the krone has been driven too low by currency speculators relative to the British pound.

(c) The European Central Bank announces that it will print billions of new euros and inject them into the economy in an effort to reduce the country’s unemployment rate.