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Real money supply and the price of foreign exchange

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Reference no: EM131687272

Assume that the output is fixed, that prices are flexible and that purchasing power parity prevails. Analyze and trace the effects of unanticipated increase in the growth rate of the money supply that is then maintained and expected to be maintained, on interest rates, and the real money supply and the price of foreign exchange.

Reference no: EM131687272

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