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8 Jan 2018
Assume an economy with floating exchange rates, price level is 100, exchange rate is 20, money supply is 10 million. Then suddenly the central bank increases money supply with 100% and keeps money supply at that (higher) level permanently. Calculate real money supply (M/P) in the long run, nominal exchange rate in the long run and expected exchange rate. Describe what happens with nominal interest rate in the short run and in the long run and describe the development of the nominal exchange rate from short to long run.
Assume an economy with floating exchange rates, price level is 100, exchange rate is 20, money supply is 10 million. Then suddenly the central bank increases money supply with 100% and keeps money supply at that (higher) level permanently. Calculate real money supply (M/P) in the long run, nominal exchange rate in the long run and expected exchange rate. Describe what happens with nominal interest rate in the short run and in the long run and describe the development of the nominal exchange rate from short to long run.
glorysoft2Lv10
28 Sep 2022
Hubert KochLv2
11 Jan 2018
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