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What will happen to the value of euro (vs. the currency of its major trading partner U.S.), if the euro zone real interest rate has gone up substantially, while the U.S. Federal Reserve has decided to keep its benchmark rate unchanged. Assuming there are only two countries, the European Union and the U.S., in your ceteris paribus analysis. show the impact of this scenario using supply / demand curve shifts to demonstrate changing equilibrium points, supplement with a description about this situation.

Reference no: EM133023214

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