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What is currency overshooting

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Reference no: EM131334870

Need the answer in 150 words.

What is currency overshooting? Using an example of a permanent decrease in money supply, explain with the help of graphs, how the money market and forex market respond to the change in the short run and in the long run.

President elect Trump is planning to invest in infrastructure. With the help of the IS-LM-FX framework, show the effect on interest rates, exchange rates and national income.

Reference no: EM131334870

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