According to an article in the New York Times in early 2012, “Bond yields have risen for countries like Brazil, Turkey and India, with investors preferring the safety of the dollar or yen.” According to the article, an economist at the International Monetary Fund used the term “flight to safety” to describe the situation.

a. What is a “flight to safety”?

b. How would the flight to safety affect the exchange rate between the currencies of Brazil, Turkey, and India and the U.S. dollar and Japanese yen? Illustrate your answer with a demand and supply graph showing the market for U.S. dollars in exchange for Indian rupees.