We noted that we could have developed our diagrammatic analysis of foreign exchange market equilibrium from the perspective of Europe, with the euro/ dollar exchange rate on the vertical axis, a...

We noted that we could have developed our diagrammatic analysis of foreign exchange market equilibrium from the perspective of Europe, with the euro/ dollar exchange rate
on the vertical axis, a schedule vertical atindicate the euro return on euro deposits, and a downward-sloping schedule showing how the euro return on dollar deposits varies withDerive this alternative picture of equilibrium and use it to examine the effect of changes in interest rates and the expected future exchange rate. Do your answers agree with those we found earlier?