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A country called Timbuktu is recording a high level of inflation relative to Malaysia. Explain how the high inflation affects the exchange rate between the
A country called Timbuktu is recording a high level of inflation relative to Malaysia. Explain how the high inflation affects the exchange rate between the Timbuktu dollar against the Malaysian ringgit ( you can assume that inflation in Malaysia remains the same). Suppose that the government of Timbuktu bans international trade with Malaysia. How would this affect your previous answer? (10 Marks).
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