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1. Whenever I see an increase in the nominal interest rate, I will always see that the nominal exchange rate will appreciate. True, false, or

1. Whenever I see an increase in the nominal interest rate, I will always see that the nominal exchange rate will appreciate. True, false, or uncertain. Breifly explain.

2. Suppose that the inflation in the USA today is the same as inflation in Europe. However, we learned today that next year inflation in the USA will be greater in Europe and that will last for a very long period of time. What should happen to the dollar today?

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