You have been hired as a Marco Economist by the President of the United States to help evaluate the recent announcement by Federal Reserve chairman Ben Bernanke that the FED will be increasing interest rates again. Ben Bernanke has justified the move on the grounds that the economy continues to be strong. Answer the following questions. Provide a graphical explanation for your answers whenever possible What is the effect on the foreign exchange market (the $ market)? 8. The exchange rate (the amount of foreign currency that a $ buys)? A. increase B. decrease C. remains unchanged 9. The U.S. dollar has? A. depreciated B. appreciated C. remained unchanged 10. The currency in the other country has? A. depreciated B. appreciated C. remained unchanged
You have been hired as a Marco Economist by the President of the United States to help evaluate the recent
announcement by Federal Reserve chairman Ben Bernanke that the FED will be increasing interest rates again.
Ben Bernanke has justified the move on the grounds that the economy continues to be strong. Answer the
following questions. Provide a graphical explanation for your answers whenever possible
What is the effect on the foreign exchange
market (the $ market)?
8. The exchange rate (the amount of foreign
currency that a $ buys)?
A. increase
B. decrease
C. remains unchanged
9. The U.S. dollar has?
A.
B. appreciated
C. remained unchanged
10. The currency in the other country has?
A. depreciated
B. appreciated
C. remained unchanged
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