Question: Based on the article Dollar Strength Gives Wall Street Something to Worry About. from the October 4, 2021 issue of the Wall Street Journal, please

Based on the article Dollar Strength Gives Wall Street Something to Worry About. from the October 4, 2021 issue of the Wall Street Journal, please respond to the following questions:

(a) Go to the FRED Economic Data site of the Federal Reserve Bank of St Louis and look up data on the monthly US Dollars to Euro Spot Exchange exchange rate (DEXUSEU).

(i) What was the US dollar price of a Euro on December 30, 2020? For December 30, 2021? Translate those exchange rates into the Euro price of a US dollar.

(ii) Given your answer to part (a(i)) above, has the US dollar appreciated or depreciated relative to the Euro over that time period? Explain.

(iii) Suppose a bottle of wine made in France has a price of 20 Euros. What would have been the US dollar price for that bottle on December 30, 2020? December 30, 2021? Given your answer to part (ii), explain what impact this would have on the cost of European exports to the United States?

(b) According to the article, why has the US dollar become stronger? What are the central factors that explain this?

(c) Using a supply and demand diagram for the US/Euro foreign exchange market, show how each of these factors identified in part (b) would affect the US dollar price of a Euro. (Put the US dollar price of a Euro on the y-axis and the quantity of the Euro on the x-axis) Explain your answer.

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