s [ g s e e 4. Using supply and demand analysis for the US spot market for Euros, show the impact of each event graphically and fill in the blanks to explain the effect on the US dollar to Euro exchange rate: a. The People's Bank of China decides to unload a large part of its US dollar reserves in order to invest more in European stock markets. Label the new equilibrium exchange rate (USS/); and the new supply/demand curve(s) S%/D?%. (4 points) Uss$ie Qe As a result, the ( demand/supply) of Euros will (increase/decrease/stay the same) and the dollar will (appreciate/depreciate/stay the same). b. The Federal Reserve decides to decrease interest rates by a quarter of a point in order to spur economic activity in the US. Label the new equilibrium exchange rate (US$/); and the new supply/demand curve(s) 52/D%. (4 points) Qe As a result, the ( demand/supply) of Euros will (increase/decrease/stay the same) and the dollar will (appreciate/depreciate/stay the same)