How would a decrease in the money supply of Paraguay (currency unit is the guaran) affect its own output and its exchange rate with Brazil (currency unit is the real) Do you think this policy in Paraguay might also affect output across the border in Brazil Explain ...

A decrease in the real money supply leads to a leftward shift in the LM curve This leads to ...

How would a decrease in the money supply of Paraguay (currency unit is the guaran) affect its

Question:

How would a decrease in the money supply of Paraguay (currency unit is the “guaraní”) affect its own output and its with Brazil (currency unit is the “real”). Do you think this policy in Paraguay might also affect output across the border in Brazil? Explain.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...