1. For each of the following: draw a supply/demand graph for the currency market in question. Label axes, the supply and demand curves, and equilibrium exchange rate. Then show and explain with words what will happen to the market after the shock described. Include the effect on the foreign exchange rate. Explain.
   1. the market for Mexican Pesos - investors speculate that the Peso will soon appreciate
   2. the market for British pounds - Brexit scares investors, so investors leave the UK
   3. the market for Korean won - Americans buy many more Korean cars

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1 Market for Mexican Pesos Investors speculate that the Peso will soon appreciate In this scenario the expectation of an appreciation in the Mexican P... View the full answer