6.3 Suppose that in a particular year there is a both an increase in the longrun equilibrium real exchange rate (13' q) and a decrease in the longrun equilibrium nominal exchange rate {J} E}. Within the context of the general model of long run exchange rate determination developed in section .5 of Lesson 6, us combination of events could be explained b].r an [increase fdecrease] in the level of domestic absorption {A}, accompanied b].r a large [increasefdecrease] in the domestic money supply,F {M}, assuming no changes in an},r other determinants of q and E. {2 marks}