NPR Business-July 22, 2022 At a time when the entire world is dealing with high inflation, worries about a global recession and markets rocked by volatility, the dollar has become an island of safety. The dollar has climbed in value against global currencies by more than 10% since the beginning of the year. A stronger dollar means US residents need to put up fewer dollars in exchange for other currencies. At the beginning of the year, for instance, it would take $1.13 to buy one euro. compared to just $1 now. It may seem counterintuitive that the dollar is strengthening with prices rising at their fastest annual pace in more than four decades. To fight high inflation, the Federal Reserve has been hiking interest rates aggressively, and that has fueled fears the Fed's policies could lead to a recession. However, they are also helping to boost the value of the dollar. "Higher interest rates generally lead to a stronger currency," says Jane Foley, the head of foreign exchange at Rabobank. "That's textbook economics." 2A. Construct two currency markets: the European Union Euro and the US Dollar, setting up the two markets in initial equilibrium at the beginning of 2022 . 2B. Make changes to the two currency markets consistent with information in the article. 2C. Explain the comment of Jane Foley at the end of the article: "Higher interest rates generally lead to a stronger currency. That's textbook economics