Using the fundamental equations from the simple monetary approach, describe how each of the following will affect
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Using the fundamental equations from the simple monetary approach, describe how each of the following will affect the home and foreign price level, real money balances, and the exchange rate, Eh/f. Also, state whether the home currency appreciates or depreciates for each.
a. An increase in home money supply
b. An increase in the foreign money supply
c. An increase in home real income
d. A decrease in foreign real income
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