Real interest rates between the European Union and the United States both equal 5%. 1. Due to a recession, the European central bank reduces interest rates to 3%. What will happen to the value of the Euro compared to the dollar? Explain. (2 points) 2. Using a correctly labeled graph of the foreign exchange market for Euro, show how the value of the Euro changes relative to the United States dollar. (2 points) 3. Based upon your graph in Question #2, what will happen to European Union exports and imports when it comes to trade with the United States? a. European Union exports to United States. (1 point) b. European Union imports from the United States. (1 point) 4. Based upon your answer in Question #3, what will happen to aggregate demand in the United States? (1 point)