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a) Return to the initial equilibrium (1 part a) and assume once again that exchange rates are flexible. Suppose that instead of a foreign demand

a) Return to the initial equilibrium (1 part a) and assume once again that exchange rates are flexible. Suppose that instead of a foreign demand shock, the initial equilibrium is disturbed by a decrease in domestic money demand (say, because of the invention of the credit card). Show the effect of this decrease in money demand

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