Assume that exchange rates are flexible. Will the following make the euro to

depreciate or appreciate? In each case you should consider whether there is

a shift in the demand and/or supply curves of the euro. Your answers should

be specific, adequately justified and accompanied by the relevant

diagrams:

(a) More cars are imported in Europe from Japan.

(b) Americans and Asian investors buy more euro-denominated bonds.

(c) Interest rates in the Eurozone increase relative to US and Japanese

interest rates.

(d) Inflation in the Eurozone is comparatively lower inflation rate than in the

US and Japan.

(e) Investment in the Eurozone by Americans and is higher than European

investment in the US.

(f) Speculators believe that the euro will appreciate.