Answer to Question #92387 in Macroeconomics for Ashleigh

Question

Question 6: Complete the below statement:
On February 1, 2017, one U.S. Dollar was worth €0.93. On February 28, 2017, one U.S. Dollar was worth €0.95. During the month of February, the U.S. Dollar _________________ (appreciated, depreciated), and the Euro _________________ (appreciated, depreciated).

Question 7: Suppose that the euro was trading for $1.2 U.S. dollar in June 2015, and then the price of euro increased to $1.5 in June 2016. How would this change affect the U.S. aggregate demand schedule?

Question 8: Suppose you and your parents are watching on TV an interview with a Wisconsin cranberry farmer who exports his produce to Europe. The farmer is cheerfully talking about how good the business has been due to the weak US dollar against the euro. Your parents, who were planning to take a trip to Italy, are very unhappy about the weak dollar and canceled their trip because of it. Why do the farmer and your parents have these two different reactions to the weak dollar?

Answer 1

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