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4. Please refer to the graph below for the following questions. Suppose that there are only two countries, Mexico and Japan. (4 points each)
4. Please refer to the graph below for the following questions. Suppose that there areonly two countries, Mexico and Japan. (4 points each) The axis is the quantity of yen and the price of yen: 20 30 40 50 120 ﬂy [l I) a] Does e in graph refer to “yen/peso” or “peso/yen”? b] At e=1, the value of Japanese exports of good, services andassets equals (in Yen]: c] At e=4, the value of Mexican exports of good, services andassets equals [in Pesos]: d] At e=4, the value of Japanese imports of good, services andassets equals [in Yen]: e] At e=1, the value of Mexican imports of good, services andassets equals [in Pesos]: f] Under fixed exchange rates, which value of the yen wouldbe consistent with Japan gaining ofﬁcial reserves as aresult of foreign exchange market intervention?
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