Problem
i. How are exchange rates determined?
ii. Among the economic factors that influence exchange rates between two countries are relative interest rates, relative inflation rates, and relative growth in real GDP. How do each of these factors influence the exchange rate? For example if the United States is growing faster than Canada, what happens to the exchange rate between US and Canadian dollars? If the rate of inflation is higher in the United States than in Canada? Or if Canada increases interest rates relative to US interest rates?