6. Assume that Japan and the US are trading partners.
a. Draw a model showing the foreign exchange for the U.S. dollar (compared with the yen) (
b. Draw another model showing the foreign exchange rate for the yen (compared to the U.S. dollar). ( Now assume that the US Federal Reserve institutes a policy that raises interest rates in the United States relative to interest rates in Japan.
c. Is this a fiscal or monetary policy? ( /1)
d. Show what happens - on both models - based on this new Federal Reserve policy.
(2)
e. Has the dollar appreciated or depreciated? C
/1)