Answer the following questions.

1. If the U.S. significantly increases its imports from Philippines (other things equal), then ________

a. The Philippine peso will depreciate against the dollar.

b. The Philippine peso will appreciate against the dollar.

c. The dollar will appreciate against the Philippine peso.

Justify your answer in every letter by giving a complete scenario or an example.

2. Describe the role and what constitute the structure of foreign exchange market.