1. Assume the United States has the following import/export volumes and prices. It undertakes a major "devaluation" of the dollar, say 18% on average against all major trading partner currencies. What is the pre-devaluation and post-devaluation trade balance? (4 pts)

Initial spot exchange rate, $/fc 2.00

Price of exports, dollars ($) 20.0000

Price of imports, foreign currency (fc) 12.0000

Quantity of exports, units 100

Quantity of imports, units 120

Percentage devaluation of the dollar 18.00%

2. EUR/USD was 1.4636 in May 9, 2011 and 1.2146 in May 10, 2021.

A. What happened to EUR against USD over the ten years? (What was the percentage change in its value? Was this a depreciation, devaluation, appreciation, or revaluation? Explain)

B. What happened to USD against EUR over the ten years? (What was the percentage change in its value? Was this a depreciation, devaluation, appreciation, or revaluation? Explain)