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)Suppose the exchange rate for the Mexican Peso was $0.100 in Jan 2020 and $0.105 in January 2021. Which currency ($ or peso) appreciated/depreciated? By
)Suppose the exchange rate for the Mexican Peso was $0.100 in Jan 2020 and $0.105 in January 2021. Which currency ($ or peso) appreciated/depreciated? By how much is the appreciation/depreciation? (b)Assume a trade relationship that allows free movement of capital between U.S. and Germany. Briefly discuss, with strong theoretical support, the impact of a relative rise in U.S interest rate on the dollar/euro exchange rate.[ In your discussion, include the role of the Fisher effect] (c)Consider the following information: U.S dollar/Zloty spot rate.. ......................... $0.23 U.S. interest rate.4.75% Polish interest6.75% What will the dollar/ zloty exchange rate be four periods from now according to PPP
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