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1. Suppose the foreign money growth rate rises. Expectations are adap- tive. (6) a. Using Fisher's condition compare the short and long run effects on

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1. Suppose the foreign money growth rate rises. Expectations are adap- tive. (6) a. Using Fisher's condition compare the short and long run effects on the depreciation rate of the domestic currency. (6) b. Use UIRP to compare the short and long run effects on the domestic interest rate for the shock in (a)

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