Currency Excange Problems

Currency Exchange Problems.

Graph the following problems using Panel 3 from your Big Graphs and Explain how each affects Imports and GDP of each partner.

1. The prices of U.S. goods rise relative to the prices of German goods.

2. Interest rates in the United States rise faster than interest rates in Canada.

3. French tourists flock to Mexico’s beaches.

4. Japanese video games become popular with U.S. children.

5. The U.S. government initiates a personal income tax reduction plan, leaving every tax-paying American with more disposable income.    
                  
6 . Japan’s fiscal policies lead to an increase in Japan’s real GDP.

7.  The U.S. federal budget deficit increases, which causes the interest rate to rise. (Assume trade with Great Britain.)

8.  Europe’s interest rates are increasing, while the U.S. interest rate remains relatively constant.

9. There is a rapid increase in the Canadian price level while the U.S. price level remains relatively constant.