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Answer the following questions 1. Why does the monetary approach imply that higher expected inflation causes a currency to depreciate? 2. What does the monetary
Answer the following questions
1. Why does the monetary approach imply that higher expected inflation causes a currency to depreciate?
2. What does the monetary theory of exchange rates imply for:
a. Relatively rapid growth in a country's money supply?
b. Relatively rapid growth in a country's national income?
c. An increase in a country's interest rates versus interest rates in another country?
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