Growth rate of the domestic money supply

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Draw and discuss the long-run time paths of the dollar interest rate and the exchange rate after the growth rate of the domestic money supply increases from π + Δπ.

Suppose Russia's inflation rate is 30% over one year but the inflation rate in Switzerland is only 2%. According to relative PPP, what should happen over the year to the Swiss franc's exchange rate against the Russian ruble?

Reference no: EM133133737

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