Suppose we were analyzing the Turkish lira per euro foreign exchange market. If the Euro-Area's price level falls relative to Turkey and nothing else changes, then the:
a. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro.
b. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market falls, causing an uncertain change in the value of the euro.
c. The supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro.
d. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.
e. The supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro.
.C
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Which of the following changes will shift AD1 to AD2?
A. A cut in personal and business taxes
B. An increase in the value of the dollar relative to other currencies
C. A shrinkage in the value of stocks and other financial assets
D. An increase in real interest rates
The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period. Economists explain this difference
A. in part because of the use of stabilization policy. B. because of increases in U.S. population due to the “baby boom.” C. in part because of the globalization of the economy. D. in part because of the use of competition policy.