(b) Suppose it is reported in the news that the US government would make a major announcement in one week's time regarding the imposition of new tariffs on goods exported from Europe. Briefly discuss one (1) reason each why:

(i) The Euro weakens

(ii) The bid-ask spread of EUR/USD widens (6 marks)

(c) It is observed that the bid-ask spread of a currency pair is wider at a bank's currency exchange counter at the airport compared to the spread at the bank's downtown branch counter. List and briefly discuss one (1) reason. (4 marks)