Question Utilize the following graphs to answer the following questions: Euro/ 5 4 3 2 1 O Nov-16 Jan-17 Mar-17 Apr-17 Jun-17 Aug-17 Sep-17 Nov-17 Dec-17 What could have caused the exchange rate to move in the way depicted in the graph? Incomes increased in Europe which caused them to decrease their consumption of imports The Federal Reserve engaged in expansionary monetary policy causing people to purchase European bonds. The European Central Bank engaged in contractionary monetary policy causing people to purchase U.S. bonds The price level in the United States decreased, which led to an appreciation of the dollar

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Transcribed Image Text: Utilize the following graphs to answer the following questions: Euro/ 5 4 3 2 1 O Nov-16 Jan-17 Mar-17 Apr-17 Jun-17 Aug-17 Sep-17 Nov-17 Dec-17 What could have caused the exchange rate to move in the way depicted in the graph? Incomes increased in Europe which caused them to decrease their consumption of imports The Federal Reserve engaged in expansionary monetary policy causing people to purchase European bonds. The European Central Bank engaged in contractionary monetary policy causing people to purchase U.S. bonds The price level in the United States decreased, which led to an appreciation of the dollar
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Transcribed Image Text: Utilize the following graphs to answer the following questions: Euro/ 5 4 3 2 1 O Nov-16 Jan-17 Mar-17 Apr-17 Jun-17 Aug-17 Sep-17 Nov-17 Dec-17 What could have caused the exchange rate to move in the way depicted in the graph? Incomes increased in Europe which caused them to decrease their consumption of imports The Federal Reserve engaged in expansionary monetary policy causing people to purchase European bonds. The European Central Bank engaged in contractionary monetary policy causing people to purchase U.S. bonds The price level in the United States decreased, which led to an appreciation of the dollar