How decrease in us interest rates affect us exchange rate

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Assignment

Problem 1: The Carry Trade: How does a decrease in U.S. interest rates affect the EU/U.S.exchange rate? (Froeb et al., 2016). (Note: Use the carry trade to predict the impact oflower U.S. interest rates on Euro/$.)

Problem 2:Dollar Devaluation: How will a dollar devaluation affect businesses and consumersin the twin cities of El Paso, the United States, and Juarez, Mexico? (Froeb et al., 2016).(Note: Make sure you explain the impact on the twin cities, not just 1 city.)

Reference no: EM131736388

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