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Impact of lowering the target federal fund rate by the FED with European Central Bank interest rate unchanged on graph of the foreign exchange market.

Assume the Federal Reserve lowers its target for the federal funds rate six times in seven months while the European Central Bank leaves its target for short term interest rates unchanged. With the help of a graph of the foreign exchange market, elucidate the effect on the exchange rate , defined as the number of dollars it takes to buy one euro.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M920444

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