Consider the simultaneous equilibrium in the US money market and the foreign exchange market. In this problem we will analyze the effect of a decline in the price level in the US. Exchange rate In the US money market, a decline in the US price level will cause the interest rate The figure on the right shows expected return on euro deposits as a function of the dollar/euro exchange rate (Es/e 1) Using the line drawing tool, draw a line representing the return on dollar deposits. Label this line 'RET-$". 2) Using the line drawing tool, draw a new line on the same graph representing the return on dollar deposits as the US price level falls. Label this line 'RET-2 Carefully follow the instructions above and only draw the required objects. Expected return on euro deposit As the result of this shock, the dollar will Rates of return appreciate Delete Clear depreciate Click the graph, choose a tool in the palette and follow the instructions to create your graph