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Chrome File Edit View History Bookmarks People Tab Window Help 82% Tue 9:05 PM Q DE . . . Lab 9 (Question 10) ~ Lyryx Learning Inc laecon1.lyryx.com/student-servlets/LabServlet?ccid=3693 Lab 9 (Question 10) Name: Rawan Abbas Date: 2020-07-21 Question 10 [15 points] Draw a foreign exchange market diagram to show equilibrium with a flexible or floating exchange rate. Suppose the initial exports X is $100, the supply curve is given by er = 0.01X, and the demand curve is given by er = 2 - 0.01X. a) Plot the supply and demand curves of the foreign exchange market. Plot the new supply curve if the supply of US dollars increases at all levels of exports by $50. Demand Curve Exchange rate 0.5- 20 40 60 80 100 120 140 160 180 Reset US dollars b) How does the increase in exports affect the foreign exchange rate? Lab 9 (Question 10) ~ Lyryx Learning Inc JUL 21 TALK ITS i laecon1. lyryx.comlstudent-servletsJLabServlet?ccid=3 6 9 3 1.5 Exchange rate 0.5 O 20 40 60 80100120140160130 i US dollars b) How does the increase in exports atfect the foreign exchange rate? The increase in exports (Select One) the balance on current account balance and (Select One) the supply afforeign exchange derived from export receipts. The exchange rate falls by D to maintain equilibrium in the balance of payments. The supply curve shifts to the (select One). a) How do exports and imports change to give balance of payments equilibrium at the new equilibrium exchange rate? The increase in exports would create a (Select One) on the current account. The protability and competitiveness of exports is (Select One) . The supply of foreign exchange from experts is (Select One) to establish equilibrium. d) What are the effects on the holdings of ofcial reserves? With exible rates the foreign exchange market adjusts (Select One) and there is (Select One) in ofcial reserves. Ofcial me: 21:05:51