Assume that the United States trades exclusively with Mexico, and that the exchange rate between the U. S. and Mexico is flexible. a. Assume that Americans desire more goods that are made in the Mexico. Show and explain how this change in demand will affect each of the following:i. The demand for U. S. dollarsii. The international value of the U. S. dollarb. Now, assume that there is an increase in real interest rates in the Mexico, but not in the United States. Show and explain how this increase in interest rates will affect each of the following:i. The international value of the U. S. dollarii. The quantity of U. S. dollars supplied in the foreign exchange market

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.