Relative values of the dollar and the french franc

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Reference no: EM1375048

1) Describe how each of the following will affect the relative values of the dollar and the French franc:

Income growth higher in the US than in France.
Inflation higher in France than in the US.
A real interest rate higher in the United States than in France.

2) What are the three categories of transactions in the balance of payments? Give an example of each.

Reference no: EM1375048

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