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The value of euro against dollar ($/ ) has depreciated from 2019 to 2020. It is because the supply-and-demand schedules are changed over time. Many

The value of euro against dollar ($/) has depreciated from 2019 to 2020. It is because the supply-and-demand schedules are changed over time. Many things can change the supply-and-demand schedules as we study: Inflation, Interest rate, Income, Government influence, and Expectation. Please describe how each of the followings can make the value of euro against dollar increase. For example, higher (or lower) inflation in U.S. make the value of euro against dollar increase (or decrease).

image text in transcribedimage text in transcribed

1) Relative Inflation

2) Relative Interest rate

3) Relative Income

4) Government

5) Expectation

Dollar price of one euro ($/ ) e2018 = e2019 e2017 e2020 2017 2018 2019 2020 Year Dollar price of one euro ($/ ) e2018 = e2019 e2017 e2020 2017 2018 2019 2020 Year Dollar price of one euro ($/ ) e2018 = e2019 e2017 e2020 2017 2018 2019 2020 Year Dollar price of one euro ($/ ) e2018 = e2019 e2017 e2020 2017 2018 2019 2020 Year

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