1. In one to three paragraphs, explain how currency exchange rates are determined and impacted by changes in import and export activity. KEY TERMS exchange rate foreign exchange market llopting exchange rate exchange rate reg me dual exchange rate Fixed exchange rate currency appreciation currency depreciation MULTIPLE CHOICE QUESTIONS 1. When the U.S. dollar decreases in value relative to the euro, it has (A) depreciated (B) appreciated (C) equalized (D) changed to a fixed exchange rate (E) changed to a floating exchange rate 2. Under a floating exchange rate regime, a currency's value is directly determined by (A) the loanable funds market of zoli (5) the money market C) the foreign exchange market D) a country's fiscal policy (E) a country's monetary policy J. Relative income and relative inflation are factors that determine (A) the value of a country's currency in the money market (H) the value of a country's currency in the inflation market (C) the value of a country's currency in the foreign exchange market (D) supply and demand of a country's currency and import (E) a country's current account