3. The Obstfeld-Rogoff (1995) "Exchange Rate Redux" modela) Discuss the key features of this model that make it distinct from a real business cycle framework. [10%]b) Discuss the intuition behind the slope of the MM and GG lines. [20% Using the model, discuss the consequences of an increase in government spending. Assess whether empirical evidence supports the model's predictions. [20%

3. The ObstfeId-Rogoff (1995) "Exchange Rate Redux" model (a) Discuss the keyr features of this model that make it distinct from a real business cycle framework. [10%] (b) Discuss the intuition behind the slope of the MM and GG lines. [20%] (c) Using the model. discuss the consequences of an increase in government spending. Assess whether empirical evidence supports the model's pre- dictions. [20%]