Explain how public debt will effect exchange rates

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Answer all questions. Make sure all workings are done.

1. Provide example of a situation if inflation in U.S is higher compared to other countries., explain the demand and supply graph between Canada and United States.

2. Briefly explain how public debt will effect exchange rates.

3. Differentiate between the 2 foreign exchange market.

4. The sales of Ford, an American is selling successfully in Germany (using the currency Deutsche Mark (DM). Explain the shifting of the supply and/or demand curves for currency. Explain whether the indicated currency appreciates or depreciates as a result of the change.

5. On Friday, November 10, 2021, the lira was worth DM 0.0013. Over the weekend the lira devalued against the DM to DM 0.0012. By how much had the lira devalued against the DM(in percentage)?

Reference no: EM133116723

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