For each of the following situations, indicate the direction of the shift in the supply curve or the demand curve for dollars, the factor causing the change, and the resulting movement of the equilibrium exchange rate for the dollar in terms of foreign currency: a. American-made cars become more popular overseas. b. The United States experiences a recession, while other nations enjoy economic growth. c. Inflation rates accelerate in the United States, while inflation rates remain constant in other nations. d. Real interest rates in the United States rise, while real interest rates abroad remain constant. e. The Japanese put quotas and high tariffs on all imports from the United States. f. Tourism from the United States increases sharply because of a fare war among airlines Q
For each of the following situations, indicate the direction of the shift in the supply curve or the demand curve for dollars, the factor causing the change, and the resulting movement of the equilibrium exchange rate for the dollar in terms of foreign currency:
a. American-made cars become more popular overseas.
b. The United States experiences a recession, while other nations enjoy economic growth.
c. Inflation rates accelerate in the United States, while inflation rates remain constant in other nations. d. Real interest rates in the United States rise, while real interest rates abroad remain constant.
e. The Japanese put quotas and high tariffs on all imports from the United States.
f. Tourism from the United States increases sharply because of a fare war among airlines
Q
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