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Questions (a), (b), (c), and (d) refer to the following figure that depicts the market in which Australian dollars are traded for Euros. Exchang- ran (05) 0 Quantity ofdollanmdod In this figure two possible demand curves are labelled D1 and D2; two possible supply curves are labelled SI and $2 and four possible equilibrium points are labelled A, B, C and D. These labels can be used to describe various scenarios in terms of shifts of demand and/or supply curves and the resulting equilibrium exchange rate. Describe what will happen in the AU D-EURO market using the above graph and corresponding labels in the following scenarios. Carefully explain each step. a. Italy decreases the demand for Australian steel by 50%. Assume that the market is initially in equilibrium at point B. (3 marks) b. Currency speculators believe that the value of the euro will decrease relative to the dollar. Assume that the market is initially in equilibrium at point A. (3 marks) c. European investors increase their holdings of Australian Government's bonds. Assume that the market is initially in equilibrium at point A. (3 marks) d. Interest rates in Australia increase relative to those in the European Union. Assume that the market is initially in equilibrium at point A