5. Generally speaking, how is the dollar price of euros determined?

Cite a factor that might increase the dollar price of euros.

Cite a different factor that might decrease the dollar price of euros. Explain: “A rise in the dollar price of euros necessarily means a fall in the euro price of dollars.” Illustrate and elaborate: “The dollar-euro exchange rate provides a direct link between the prices of goods and services produced in the eurozone and in the United States.” Explain the purchasing-powerparity theory of exchange rates, using the euro-dollar exchange rate as an illustration. LO27.3