Use the graph below to answer questions 17- 20.
Figure 1.2
-Refer to Figure 1.2.Suppose that the market for euro is initially in equilibrium at point A with the exchange rate $2.00 per euro.When the supply curve shifts to S₂,the euro ___________ and the quantities of euro traded in the market __________.

Question

Use the graph below to answer questions 17- 20.
Figure 1.2

-Refer to Figure 1.2.Suppose that the market for euro is initially in equilibrium at point A with the exchange rate $2.00 per euro.When the supply curve shifts to S₂,the euro ___________ and the quantities of euro traded in the market __________.

Quizplus · Accepted Answer

When the supply curve shifts to the right from SS to SS1, the exchange rate depreciates (moves from point A to point B) and the quantity of euros traded in the market increases (moves from point A to point C).

Use the Graph Below to Answer Questions 17- 20