Country X and Country Y are trading partners each with a current account balance of zero. Country X's currency is the dollar. and Country V's currency is the peso (5 pomta) a. If interest rates in Country X increase, will the immediate consequence be a current account decrt, surplus, or no change for Country X7 Explain b, Draw a graph of the foreign exchange market for the dollar of Country X. Illustrate the effect of the Increase in interest rates in Country x on the value of its dollar compared to the peso of Country Y. co Now if Counter enters a severe recession what will be the impact on demand for the dollar of Country X? Explain. d. Based on part (c), what will be the effect on the value of the dollar of Country x compared to the peso of Country W