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This is the foreign exchange market of Euro. Based on the table below, answer the following: Demand and supply schedule for euro Price of Euro
This is the foreign exchange market of Euro. Based on the table below, answer the following: Demand and supply schedule for euro Price of Euro (in USD) Quantity demanded of Euro Quantity supplied of Euro $5 60 120 $4 90 90 $3 120 60 Draw the supply and demand graph for Euro and find the equilibrium exchange rate (how much dollars one euro costs?) Suppose supply reduces by half. Draw the new supply curve and find the new equilibrium exchange rate. With this new equilibrium exchange rate, has the dollar appreciated or depreciated? Justify! With the new equilibrium exchange rate, what happens to the U.S. imports of European goods? Justify
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