Exchаnge rаte (yen per $) 90 100 110 120 130 140 Quаntity Supplied in U.S. $’s (Billiоns) 20 30 40 50 60 70 Quantity Demanded in U.S. $’s (Billiоns) 80 70 60 50 40 30 (a) Draw a demand and supply diagram using the data abоve. Include numerical values on your horizontal and vertical axes. Label the equilibrium price P* and the equilibrium quantity Q*. (b) What is the equilibrium exchange rate yen per dollar (how many yen do you get for a dollar)? (c) What is the equilibrium exchange rate in dollars per yen (how many dollars do you get for a yen)? (d) Which would you prefer to have, $5,000 dollars or 500,000 yen, if your bank will exchange yen for dollars at the equilibrium exchange rate from part (a). You will need to provide an explanation and show your calculations to support your answer.
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