Suppose the equilibrium exchange rate for dollars to euros is 1.2 $/€ representing 2 billion dollars traded, and the German consumers have recently started buying the latest iPads
What would you expect to happen to the equilibrium quantity and price in the currency market?
A) The equilibrium price and quantity would fall.
B) The equilibrium price and quantity would rise.
C) The equilibrium price would rise, and quantity would fall.
D) The equilibrium price would fall, and quantity would rise.
Answer: A
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If these probabilities are stable over the years, and if company A has 500 clients and company B has 300 clients, (a) how many clients will each company have next year? (b) how many clients will each company have in two years?
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