Explain how the dollar price of euros is determined

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Reference no: EM131778514

Question: Analyze the concept of exchange rate:

1. Explain how the dollar price of euros is determined.

2. Identify a factor that can increase the dollar price of euros.

3. Identify a factor that can decrease the dollar price of euros.

4. Explain why a rise in the dollar price of euros means a fall in the euro price of dollars.

5. Explain the purchasing-power-parity theory of exchange rates, using the euro-dollar exchange rate as an example.

6. Explain why a quota is more detrimental to an economy than a tariff that results in the same level of imports as the quota.

7. What is the net outcome of either tariffs or quota for the world economy?

Reference no: EM131778514

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