The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph. The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling.The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity ofshillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the verticalaxis. Answer the questions based on the graph.0.500.4500.400.35gd0.300.25€0.2000.150.100.050.00010Supply of shillingsDemand for shillings20 30 40 50 60Quantity of shillings (in thousands)70 80 90Suppose the average income of Median Earth's citizensincreases by 20% more than the average income ofNormandy's citizens. How will this affect the foreignexchange market for shillings (Median Earth's currency)?Move the appropriate curve in the graph to demonstratethis change. In the graph, what is the new equilibrium exchange rate after the change in the foreign exchange market occurs? Enter youranswer exactly; do not round (if the new exchange rate is 0.08, make sure you input your answer as 0.08).doubloons per shillingAfter the change in the foreign exchange market, what happens to the value of the doubloon?O The answer cannot be determined from the given information.O The doubloon depreciates in value.O The doubloon appreciates in value.O The doubloon retains its original value.

The exchange rate is the concept of international economics, as the name suggests its rate of…

The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph.

The graph represents a foreign exchange market and shows the supply and demand for Median Earth's currency, the shilling. The price of a shilling is stated in terms of Normandy's currency, the doubloon. The horizontal axis shows the quantity of shillings that are desired and offered for exchange. The exchange rate in doubloons per shilling is measured on the vertical axis. Answer the questions based on the graph.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter20: International Finance

Section: Chapter Questions

Problem 10PAE

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