3. In each example, determine if the demand or supply of dollars (or both) will change and in what direction (increase or decrease):

a. Increase in U.S. demand for imports.

b. The interest rate in other countries increases.

c. U.S. residents believe the dollar will depreciate.

d. Increase in world demand for U.S. exports

4. a.Define appreciation and depreciation of the dollar.

b.If the demand for the dollar increases, will the dollar appreciate or depreciate?

c.If the demand for the dollar decreases, will the dollar appreciate or depreciate?

d.If the supply of dollars increases, will the dollar appreciate or depreciate?

e.If the supply of dollars decreases, will the dollar appreciate or depreciate?

5. If the dollar's value changes from .89 euros to .82 euros per dollar has:

a. The dollar appreciated or depreciated?

b. The euro appreciated or depreciated?

c. Suppose the exchange rate between the U.S. dollar and the euro is .89 euros per dollar.If a gelato in Rome costs 4 euros, what is the cost in dollars?