1. D1 or D2

2. D1 or D2

3. depreciated or appreciated

4. PLN5/$1 or PLN4.2/$1

5. depreciated or appreciated

6. sell or buy

7. purchase or sell

8. S1 or S2

9. S1 or S2

10. strengthen or weaken

1. D1 or D2

2. D1 or D2

3. depreciated or appreciated

4. PLN5/$1 or PLN4.2/$1

5. depreciated or appreciated

6. sell or buy

7. purchase or sell

8. S1 or S2

9. S1 or S2

10. strengthen or weaken

PLN/euros S1 S2 5.00 4.20 D2 D1 Q1 Q2 Q3 Quantity of euros National Bank of Poland (NBP) has fixed the zloty to the euro at PLN 4.20/1. A sharp current account deficit put pressure for the zloty to depreciate against Euro due to increasing demand for Euro which shifted the demand curve from to As a result, Euro to PLN5/ 1 To fight zloty's - and avert to the original fixed rate, the NBP has to Euros in the foreign exchange market to zloty and shift the, as these sales would shift the supply of Euros from . 4 to Such an intervention would the zloty against the depreciation pressures and allow the exchange rate to remain PLN 4.2/1. Please answer all parts of the question. PLN/euros S1 S2 5.00 4.20 D2 D1 Q1 Q2 Q3 Quantity of euros National Bank of Poland (NBP) has fixed the zloty to the euro at PLN 4.20/1. A sharp current account deficit put pressure for the zloty to depreciate against Euro due to increasing demand for Euro which shifted the demand curve from to As a result, Euro to PLN5/ 1 To fight zloty's - and avert to the original fixed rate, the NBP has to Euros in the foreign exchange market to zloty and shift the, as these sales would shift the supply of Euros from . 4 to Such an intervention would the zloty against the depreciation pressures and allow the exchange rate to remain PLN 4.2/1. Please answer all parts of the