1. Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession. c. Assume the recession in Braveland causes a decrease in the demand for...

1. Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession.

c. Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro.

i. Explain whether the euro will appreciate, depreciate, or remain unchanged against the dollar.
ii. Draw a correctly labeled graph of the foreign exchange market for dollars and show the effect of the decrease in demand for dollars on the

exchange rate for dollars.