Question
INTERNATIONAL FINANCE US income increases relative to UK income Arrows Why? Explain Demand analysis What happens to the demand of the British pound by US
INTERNATIONAL FINANCE
US income increases relative to UK income
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| Arrows | Why? Explain |
Demand analysis | What happens to the demand of the British pound by US citizens? |
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Supply analysis | What happens to the demand of USD by the British? |
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How does this affect the equilibrium exchange rate? Illustrate using a graph. Clearly label the graph. Use dotted lines to show the shifts. Give the values for e0 and e1
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e0 = e1 = | ||
Did the British pound appreciate or depreciate? Answer:_____________________________ | Formula: Calculations: | ||
Did the UD dollar appreciate or depreciate? Answer:_____________________________ |
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Conclusion:
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