Consider a country like Thailand and its currency of Thai Bath (THB) and please answer the following questions.

a) How are %age changes in a currencys value measured? Illustrate your answer numerically by assuming a change in the THBs value from $0.022 to $0.026.

b) What are the basic factors that determine the value of a currency? In equilibrium, what is the relationship between these factors?

c) How might the relatively high levels of inflation and interest rates in Thailand affect the THB value? (Assume a constant level of U.S. inflation and interest rates.)