Invivo Company is a New Zealand-based company that deals in wine products and receives Euro every month. It converts those Euros into New Zealand dollars and needs to monitor the Euro's value in the future closely. The Invivo company owners expect inflation to rise substantially in the Euro region, whereas inflation in New Zealand will remain low. They also expect that the Euro region and New Zealand interest rates will increase with the same rate.

a. given the owners expectations, forecast whether the Euro will appreciate or depreciate against the dollar over time.

b. Given the owner's expectations, will the Invivo Company be favourably or unfavourably affected by the future changes in the Euro's value?