Assignment:
Part 1
1. Analyze the concept of exchange rate.
- Explain how the dollar price of euros is determined.
- Identify a factor that can increase the dollar price of euros.
- Identify a factor that can decrease the dollar price of euros.
- Explain why a rise in the dollar price of euros means a fall in the euro price of dollars.
2. Explain the purchasing power parity theory of exchange rates, using the euro-dollar exchange rate as an example.
Part 2
Explain why a quota is more detrimental to an economy than a tariff that results in the same level of imports as the quota.
- What is the net outcome of either tariffs or quota for the world economy?
Organize your assessment logically with appropriate headings and subheadings. Support your work with at least 3 scholarly or professional resources and follow APA guidelines for your citations and references. Be sure you include a reference page.