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5. You determine that the real interest rate in the nation vou visited has risen above the real interest rate in the US. Explain the

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5. You determine that the real interest rate in the nation vou visited has risen above the real interest rate in the US. Explain the impact on the international value of the two currencies. What will this do to the U5 aggregate demand, price level and real income in the U5? Explain. If the US Federal Reserve wanted to reverse the change in the international value of the US dollar, what open market operation would it purse? Explain. 5. While you were abroad, you met a wonderful family from the countrv in which you stayed. You read an article about a natural disaster hitting the town where they.r live. 'I'ou decide to send them money to help recover. Where is this money recorded in the balance of payments? Explain the impact on the US Current account, if it was zero to begin with. T. What is the major export of this nation? Explain using economic terminologv {could also use a math calculation} whv this nation should be producing and exporting this item instead of the U5. 3. You learn that the US Congress is considering placing a tariff on the nation's major export to the U5. Draw a market graph for the expert product. Show and explain the impact of the tariff on this market. {Assume that there was completelv open free trade before hand].

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