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a. Use the table below. If you were to predict the $/euro exchange rate, what would the expected exchange rate be? b. If the Federal

a. Use the table below. If you were to predict the $/euro exchange rate, what would the expected exchange rate be?

b. If the Federal Reserve wants the dollar to depreciate against the euro in the long run, what monetary policy should they implement to ensure that?

(Please show calculations and reasonings)

Country	Exchange Rate	Money Growth	Real Income Growth
United States	4%	2.5%
Mexico	0.25 $/peso	6%	5%
UK	1.5 $/GBP	2%	2%
France	1.2 $/euro	7%	4.5%

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