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1. In 2014, the euro was trading at $1.35 on the foreign
exchange market. By 2015, the rate had fallen to $1.10, due to
falling European interest rates. Explain the fall in the price of a
euro using supply and demand curves, and in words.2. Using
shifts in supply and demand curves, describe how a change in
the exchange rate affected your industry. Label the axes, and
state the geographic, product, and time dimensions of the
demand and supply curves you are drawing. Explain what
happened to industry price and quantity by making specific
references to the demand and supply curves. How can you profit
from future shifts in the exchange rate? How do you predict
future changes in the exchange rate?

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