Answer the Questions Below

question 10

Essay

Answer the questions below.
a.Suppose the Federal Reserve raises the federal funds rate in the United States but people believe that the inflation rate will rise by more than the Fed raised the federal funds rate.
What do you expect to happen to the exchange rate? Explain why.

b.As the exchange rate changes in the direction you determined in part a, what happens to the prices of imports and exports in the United States and in other countries? Explain.

c.What happens to net exports in the United States and in other countries that trade with the
United States in the short run? In the long run? Explain.

---

Definitions:

Sinuous

Describes shapes or movements that are winding or curving in a graceful and smooth manner.

Domestic Setting

Environments or scenes relating to the home or household activities.

Canon Of Representation

Established norms or standards in art and literature that dictate how subjects are depicted, often based on cultural, religious, or social values.

Frescoes

A method of mural painting executed upon freshly laid lime plaster, allowing the paint to become an integral part of the wall.