1. Discovering Data Not all pegs are created equal! In this question you will explore trends in exchange rates. Go to the St. Louis Federal Reserve’s Economic Data (FRED) website at https://research.stlouisfed.org/fred2/ and download the daily United States exchange rates with Venezuela, India, and Hong Kong from 1990 to present. These can be found most easily by searching for the country names and “daily exchange rate.”

a. Plot the Indian rupee to U.S. dollar exchange rate over this period. For what years does the rupee appear to be pegged to the dollar? Does this peg break? If so, how many times?

b. How would you characterized the relationship between the rupee and the dollar from 1998–2008? Does it appear to be fixed, crawling, or floating during this period? How would you characterize it from 2008 onward?

c. The Hong Kong dollar has maintained its peg with the United States dollar since 1983.

Over the course of the period that you have downloaded what are the highest and lowest values for this exchange rate?

d. Venezuela has been less successful in its attempts to fix against the dollar. Since 1995 how many times has the Venezuelan bolívar peg to the dollar broken? What is the average length of a peg? What is the average size of a devaluation?