AutoSave (. Off) QS 2 - Protected View - Saved to this PC 9 Search Chen C X File Home Insert Design Layout References Mailings Review View Help Share Comments i PROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Enable Editing X Calculate the foreign currency and domestic currency values of imports. What will happen if the exchange rate falls to 1.20, assuming that the value of the elasticity of demand for imports is -0.5? What if the elasticity is -2.5? 3. Use the supply/demand/trade model of the exchange rate to analyse the effects on the exchange rate of a rise in domestic personal income. You might begin with trade effects and proceed along the lines: (a) Which of the import/export markets is affected? (b) How is this market affected? (c) What is the effect on the supply or demand for foreign exchange? (d) What is the effect on the exchange rate? Are there likely to be additional effects through non-trade channels? 4. Repeat question 3 for decrease in domestic production costs. Page 1 of 1 217 words [ Focus - + 100% W 11:03 2020/8/20