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Supply and demand (last one):
According to a short article published in The Wall Street Journal on September 18, 2015, "The dollar extended declines against ... Japan's yen after Thursday's sharp losses against a broad range of currencies. Lower rates are a drag on the dollar, as they make the currency less attractive to investors, [who seek higher returns in other currencies].... [relative to Thursday's closing price of 120.21] the greenback was 0.8% lower [on Friday] against the yen at around Yen119.25."
a. Below, demonstrate the effects described in the market for dollars (the effects that moved the price from 120.21 to 119.25). Please specifically discuss which curves shift and why. Please carefully label your graph.
b. Below, demonstrate the effects described in the market for yen. Be extremely careful in labeling your graph. As discussed in class, seemingly innocuous mistakes or omissions in labeling can severely affect the accuracy of your graph. Please pay special attention to the price.
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